Recently i came across interesting data related to mutual fund investments fro indian investors , It may not be the new trend to some extent as it had hapened earlier also , still for your information i am sharing this inputs .
In 2018- 19 approx 90000 crore were coming from the monthly Sips in finacial year but this amount changed in 2019-20 to 100000 crore , Later in 2020-21 it fal down slightly to 96000 crore and then in 2021-22 it jumped back to 124000 crore .
The drop in the yer 2020-21 can be because of the corona impact . There had been economical changes for major part of the population around world because of pandemics , So same must have resulted for the reduction in the Sip amounts for this mentioned year .
Why i have shared this data , i feel that many of the investors who had started sips before 2020 have'nt increased their amount or have not topped up their sips , There might be people whose income has not increased and its ok for such people to continue with their main amount . But there are examples of investors whose income has increased but they still doing the sips for same amount !
are you one of those ? If yes then understand this ! We all say that petrol prices are pushing up so the cost of living is increasing , true but then we must think it this way that if it is the case then how our old amount set sips can give us the adequate fund for the future needs ?
Some of you might have consider the inflation factor while planning their sips , Good but still in my view its Good if you can increase our sip amount according to your surplus amount left because of income rise .
Sips is not like fill it and shut it way ! if you have the room to add more money then one should go ahead with it !
we can also say that because of the corona and due to the short span recovery of the market more investors have attracted to investing in mutual funds . May be some of them wish to build emergency fund to get ready for the bad days or they want to build wealth and feel mutual fund as the best way , what ever the reason can be , mutual fund investors count has crossed 5 cr mark . Still we have large potential to grow compared to other countries around world .
If we asume our population to be 130 crs and out of that consider only 20 % as earning class then still we can have 15-20 crore more investors in mutual funds . The aum of the industry is approx 75 lakh crore* ( check the exact figure from official websites ) then you can imagine how much will be the Size of it once these 15-20 crore investors comes , Its Huge FIGURE
The imortant point here is your Sip contribution needs to be adequate enough if you wish to build real wealth . Mutual funds performance impacts by 2 key factors :-
1 - How much time we give it to grow
2 - How much amount we invest
Figure A
Figure B
Figure C
As you can see by increasing 10 yrs time , the fund size in Figure B gets 6 times more , And in Figure C if you increase the Amount by 10k then the Fund value gets Doubled in the same Investment period
So to summarise , Its very important to make changes in the amount of the Sip as it's easy to do compared to changes in the Investment Period , This will help you to grow your fund faster and better . Also never get panic in short time if your Goal is for long Duration ,
The data from amfi shown below also shows that ,
When markets are in discount people avoid investing and when markets are on higher side investors start investing , Ideally in cheaper markets its best time since you get more units at lower costs , But Human nature does'nt allow to do it :)
No one knows the peak and bottoms of the markets so it's not logical to time the markets , Instead the time spend in the markets is more crucial to define your over all returns .