If you are investing in SIP (Systematic Investment Plan), it can earn strong profit for you in the first 7 years. Especially in midcap and smallcap stocks, where the storm keeps on coming in the market. Motilal Oswal’s report shows that those who stay in SIP for 7 years have received great returns, no matter how much the market falls.
What does research say?
Motilal Oswal analyzed SIPS of 5, 7 and 10 years and some interesting things came out:
- No one suffered losses after 7 years in midcap SIP. (Possibility of loss = 0%)
- Only 9 out of 155 in Smallcap SIP suffered losses (ie only 5.8% probability)
- Even in the recession of March 2020, the one who has patience, came in profit next year.
According to the report, the maximum damage in Smallcap SIP was -7.3%. The special thing is that in March 2020, all the categories (largecap, midcap, smallcap and multicap) and all SIP periods (5 years, 7 years, 10 years) saw the worst return. But, if the investors did not panic at that time, they would have had a good experience.
Market fell? Do not panic, just stop!
The report said that even if the SIP was stopped instead of continuing SIP even in a recession like 2020, there would be tremendous profit next year! That is, there will be ups and downs in the market, but those who stay in investment, they win.
The report said what a lesson was found?
- Patience is the real key! Do not make the mistake of breaking SIP in a hurry.
- The market falls, but then emerges too! Just keep riding.
- Midcap and smallcap have a chance to grow in long -term.
First Published – February 14, 2025 | 7:57 pm IST
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