I have got a lot of queries from people asking me “should I stop my SIP”. Sorry I do not answer personal queries simply because I do not know you. I do not like to give advise to people online – especially if I have never met them, cannot assess them over phone, and have no clue about their maturity.
So a 35 year old mother of 2 with an MBA degree, a Major in the army, a group captain, a doctor aged 43…are good prime candidates whom I am happy to associate. Not people whom I cannot in my mind put in a box. One woman an engineer turned out to be a psycho patient – and that scared me. I ran away from her and blocked her on FB too. Its just too risky to advise online. However the following is generic:
- if you did not know why you started a SIP, I guess it is all right to close it. Go ahead.
- you have genuine cash flow problems – and you think it is temporary
- you found a better fund in which to invest
- you bought a house and have to pay the SIP
- you need money for some immediate use
- you need money after 3 years and are doing a tactical asset allocation
- you have achieved your goal and are encashing the same for usage
These are the genuine reasons why you should be stopping or scaling down the SIP. However, if you are stopping the SIP because of the following reasons:
- you think the market is too high
- you think the market is about to fall dramatically
- your friendly adviser told you to stop for 5 months
- your adviser tells you that the markets are volatile
- you feel that the markets will be volatile
- you think you will RE-START when the market falls
- your friend told you so
- you saw the ‘Mutual funds sahi hai’ ad and was inspired to call your friend
- you are now switching from a large cap fund to a mid cap fund
- you are now switching from mid cap fund to large cap fund
- one expert on TV asked you to do so
Well some of the reasons are good reasons to stop the sip / suspend the sip. Some are not. Go read, gimme a break
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