How Mutual Fund SIP Investing Patterns Changed Post Covid?

Operation of the Stock Market

The stock market operates in cycles and every 6-8 years approximately, there is a crash. This may occur for several reasons, from a bubble burst to a catastrophic disease to an economic downturn. In 2020, the virus had its chance and the stock market suffered big time. The world has been divided into two phases after the pandemic.

There have been dramatic shifts in the post-Covid era from skyrocketing Demat account openings to mental health awareness, work-from-home culture, etc. People’s investment habits have also changed; many are now investing in Mutual Funds through a SIP app.

The Important Transformation

The most important shift that has taken place is that people have started taking investing more seriously than before. The awareness about diversifying your portfolio to protect your money from such stock market crashes has been huge.

The Inflows of 96000 crores in Mutual funds in the Previous Financial year are massive. In March 2021, there was an all-time high inflow in Mutual fund SIPs worth Rs.9182 crores over the last 12 months. This fact reflects that Mutual Funds are being considered a serious option for investing. Indians are diversifying their portfolio by including Cryptocurrency, Gold, Debt in their basket. Sole dependency in Equities can be a lethal proposition.

Facts About Mutual Fund SIPs

What is a SIP?

A SIP is a Systematic Investment Plan wherein the investor follows a disciplined approach towards Investment Irrespective of whether the market is falling or not, regular investing helps in rupee cost averaging and helps against volatility.

Many people indeed had to withdraw their investments to survive the lockdown. The ones who held onto their Mutual Fund SIP gained a staggering return over the period.

Start building discipline through this SIP App

After the stock market crash, markets crossed an all-time high, giving investors heavy returns.

A SIP Calculator proves helpful in setting your future goals by committing a particular amount to be invested every month for a certain duration.

For example, if you wish to buy a house at 30, Mutual Fund SIP assists you in fulfilling your goal by systematically investing a particular amount every month according to your needs.

So, by investing 25000 into SIP every month for 10 years with a 15% return on investment, you generate a corpus of around 70 lacs in 10 years. One can reverse calculate to know how much they need to save to meet their goals. .

Investing is about fearing greed and being greedy when everyone is fearful.

How the Pandemic Changed the SIP Investment Pattern

  1. Firstly, there has been a clear spike in account openings in this phase, leading to a rise in SIPs.
  2. People started considering Equity as a good investment tool yielding higher returns than debt and gold.
  3. The Unstable Cryptocurrency taught a lesson of monthly disciplined investing.

Why has the Mutual Fund SIP Investment Pattern Changed?

The mutual fund industry added more than 81 lakh investor accounts in 2020-21. With India still lagging in people participating in the Stock Market, this number will only rise in the future.

Here are some points about the change in the mindsets of investors.

  • Investors are now aware of the importance of having short term and long term goals and investing accordingly.
  • They have diversified shifting from traditional investment options like gold and real estate because of awareness about the returns.
  • They are going for a safe investment option with decent returns on investment with a disciplined approach.
  • They have understood the smooth procedure of SIP creation using the SIP app which saves time and doesn’t require much monitoring.

In the Stock Market, especially in India, people want tips about where to invest their money rather than actively researching. Mutual funds are the best option in such a case as they are managed by active fund managers who put investors’ money into different instruments after doing proper analysis.

Summing Up

The Mutual Fund industry has been on its toes. Mutual Fund SIP is becoming a necessity and a great way to kickstart your goal-oriented life. Be it buying a car, going on a world tour or planning your retirement, SIP Investment Calculator is always going to be your companion.

It’s the best way to manage your finances and make constructive financial decisions.

Download this SIP App and commence your journey towards Financial Freedom today!