I needed some tips regarding SIP intervals for MF/ETF…
Say if we are running SIP in index funds or even other funds in situations like current times where index is already trading at its highest point. What do you suggest is better, running SIP of intervals in longer period like quarterly or shorter duration like monthly or even shorter like weekly/15 days. TIA
At this very high level, I would create an SIP in liquid funds in the folio as index funds for the amount I wish to do in index funds. As and when the market corrects I would switch from liquid to Index fund and create an SIP in index funds.
And what if market do not correct for couple of years? Ever thought about that?
@Sant if your investment horizon is just couple of years to 4-5 years, means you are almost reaching your goal (and would be needing money shortly) in that case instead of investing more in equity, you should be thinking about moving out of equity and slowly tilting you asset allocation towards debt.
Unless of course it is not goal based and you are just investing without any need for money in next few years. Than you should continue your SIP without tinkering the intervals.
Frankly, trying to time the market using “Systematic Investment Plan” is kind of oxymoron. Either you should time the market and make lumpsum investments as needed or do a SIP and stop worrying about timing the market. No point trying to do both.
Thanks guys for your response. But I guess we are missing the real concern here in the original post. It was more of doubt regarding correlation between amount and tenure of SIP; as in small amount in smaller intervals vs large amount in larger intervals for SIP, which one is better in confused or volatile market.
As of now what is reflected in various comments is “generalized approach to investment in the current scenario”.
Most of my SIPs are for long term (10+ years). I keep frequency monthly and do not tinker it regardless of market levels. Also, every year I increase the amount on SIPs.
SIPs are meant to be systematic and I keep it that way. Also if horizon is long enough (10 years +), frankly a weekly SIP or quarterly SIP will make minuscule difference in overall returns, compared to monthly SIP.
For timing market I use direct investment in ETF, stocks. That is discretionary based on my gut feeling
First of all, I would advise to stop automated SIP strategy. Invest only when index is down or in correction mode. At each correction of 2% or more invest a fix amount. This way you will gain best from NAV.