1. Premature exits When markets tank, investors discontinue SIPs fearing greater losses. They actually end up far worse compared to those remaining invested for 8-10 year or more who gain immensely
2. Irrational euphoria When markets are on a roll, investors either redeem investments or migrate to lower- risk instruments, limiting their growth prospects.
3. Incorrect benchmarks People often discontinue SIPs comparing performance over very short periods time be it monthly, quarterly or yearly basis.
4. Comparing SIP and lump sum returns Many investors incorrectly compare SIP returns with lump sum investment returns. SIP investments are made over a period of time and have different time values of money and return calculations need to take this into account
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