Don't set and forget: Why your SIPs need regular check-ups

India Today

a day ago

It's often said that once you start your SIPs (Systematic Investment Plans), you should forget about them and let compounding do its work. But experts believe this advice only works halfway. While discipline is key in wealth building, blindly leaving SIPs untouched for years could do more harm than good.While the idea of 'set it and forget it' may seem peaceful, doing so could lead to long-term underperformance, missed opportunities, or even a shortfall in your retirement goals. Experts suggest a more balanced approach—stay invested, but also stay informed.SIPs NOT ONE-TIME DECISIONTrivesh, COO of Tradejini, explains why ignoring SIPs for years can be risky.'Markets change, fund strategies shift, and your financial goals may not be the same five years down the line,' he says. 'If an SIP isn't performing and you're not reviewing it, you could be locking yourself into poor returns for years.'Even the best-performing funds can begin to underperform if market conditions change or if there is a shift in fund management. That's why it's important to keep an eye on how your SIP is doing over time.WHEN AND HOW OFTEN TO REVIEW SIPsMost experts suggest reviewing your SIP investments at least once a year. Trivesh recommends a check every six months, but only after the fund has had at least two years to stabilise. 'Don't judge a fund too early. But after two years, regular reviews are a must,' he says.Gaurav Garg from Lemonn Markets agrees. He suggests a full review every 3 to 4 years, especially if you're investing for long-term goals like retirement, buying a house, or funding your child's education.WHAT SHOULD TRIGGER A REVIEW According to Gaurav, there are several key situations where a review becomes necessary:A change in fund managerConsistent underperformance over a 3–5 year periodMajor life events like marriage, a new job, or having childrenA change in your risk appetite or financial goalsUnusual shifts in the fund's asset allocation or strategyTrivesh adds that 'a few employers deduct EPF or NPS contributions but don't deposit them. Something similar can happen with SIPs—just because the deduction is happening doesn't mean your money is performing as expected.'RISK OF UNDERPERFORMANCEIf an SIP fund consistently trails behind its benchmark or peer group, it can have a big impact on your wealth over the long run. 'The power of compounding works both ways,' says Gaurav. 'If you are in a poor-performing fund, that loss also compounds over time.'Missing or incorrect deposits, delays in fund updates, or outdated KYC details can also cause trouble when you try to withdraw or switch funds.Both experts stress that short-term market noise should not be the reason to stop SIPs. In fact, SIPs work best during volatile periods. However, persistent underperformance, poor management, or misalignment with your goals should not be ignored.'Discipline is good, but discipline without attention is dangerous,' says Gaurav.Thankfully, tracking your SIPs is getting easier. Many platforms offer simple dashboards, alerts, and mobile apps to check fund performance. Some mutual fund platforms now even offer automated advice on underperforming SIPs and goal tracking tools.The message is simple, automating your investments doesn't mean forgetting them. 'Monitor your SIPs, make sure they are aligned with your goals, and don't hesitate to switch if things don't add up,' says Trivesh.Staying invested is important. But being informed is even more important.(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)- Ends
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