Do not panic if SIP return is in the red, give it time to recover

Any money that you need in the short term should be pulled out of equities

Returns from systematic investment plans (SIPs) are not supposed to turn negative. But they have currently. Average SIP returns of diversified equity funds across market caps and investment horizons (up to five years) are in the red. SIP returns are also looking poorer at present than trailing returns (see table).

The swift fall in the markets is behind both the phenomena. “SIPs work well when the markets witness a downturn and then rally. With each instalment you are able to purchase units at lower levels. This pays off when the markets move to a higher level. When the opposite happens