Many of us dream of growing our savings—just a little extra saved could mean a lot more returns. Naturally, we start exploring ways to invest smarter. One popular method that has caught the attention of many is the SIP. This “SIP” is about systematically investing your money, with the hope of reaping steady returns over time.
Let’s dive into the world of Systematic Investment Plans (SIPs) and understand whether they’re really as promising as they seem—or just a mirage.
The SIP Rollercoaster: Returns Going Up and Down
For a while, people were thrilled with SIP returns—30%, even 35%! But recently, phone calls started pouring in:
“Hey, my 35% returns are now in the negatives!” “My returns dropped to just 5%!” And then a few weeks later, “It’s back up again—my returns are looking good!”—only to dip once more.This felt like the mirage in the desert—where water appears on the horizon but vanishes as you approach. Many began to wonder: Is SIP just an illusion?
No, SIP Is Not a Scam
Let’s get this straight—SIP is not a scam or a trick. The money you invest through SIP ultimately goes into mutual funds, which are managed by Asset Management Companies (AMCs). These mutual funds then invest in the stock market.
When the market rises, your returns go up; when it dips, your returns can temporarily turn negative. This is simply how the market works. For example, Nifty had climbed from 7,500 during the COVID crash to a peak of 26,277, and now it hovers between 24,000 and 25,000. It’s natural for your investments to reflect these fluctuations.
Trust the Experts, Stay Consistent
Here’s where SIP shines:
You don’t have to pick individual stocks yourself. A team of experts manages your investments, choosing where to allocate your funds.
When the market dips, don’t panic. Your SIPs will reflect a positive outlook once the situation resets.
When’s the Right Time to Invest?
A common question is, “When should I invest in the stock market?” The answer is simple:
For long-term investors, the best time to invest is always.
Whether the market is up, down, or sideways, your SIP continues, building your portfolio steadily. Over time, this compounding effect works in your favor.
Why Some Think SIP Is a Mirage
Here’s the catch: After the COVID crash, the stock market mostly moved upward. Many new investors, especially younger ones, had never experienced a significant market drop. So when the market corrected, they panicked, thinking SIP was a scam.
But remember that familiar phrase:
“Mutual funds are subject to market risk.” Listen closely, and you’ll realize it means that over the long term, your returns will average out. Short-term losses or dips are natural—don’t let them shake your confidence.
What Returns Can You Expect from SIP?
In a normal market:
12–15% annual returns are quite achievable.
This far outpaces typical bank returns, which now hover around 5–7%.
Even in tougher market conditions, SIPs can offer around 10–12% returns.
Sure, a poorly performing fund might give just 5–6%, but that’s still better than many traditional saving methods.
SIP isn’t magic, and it certainly isn’t a mirage. It’s a smart, steady way to invest for the long term. Keep an eye on the market, trust the experts managing your funds, and most importantly, be patient. The rewards will come.
