SIP Calculation: Over the past few years, mutual fund investment has become a popular choice. A major reason for this is the attractive returns offered by these schemes. Mutual funds typically generate an estimated annual return of 12 to 14 percent, although the final return may be higher or lower depending on market movements.
How much will a SIP of Rs. 2,000 create?
SIP calculations make it easy to understand how a small investment can create a substantial corpus over the long term. If an investor invests Rs. 2,000 every month and earns an average annual return of 12 percent, a substantial corpus can be created after 10 years.
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How much will the SIP return be?
In this example, the investor will invest a total of Rs. 240,000. At a rate of 12%, this amount could grow to approximately ₹465,000 in 10 years. The resulting return of approximately ₹225,000 would be a return, demonstrating the power of compound interest.
What to do about short-term losses
Investors often become concerned after seeing losses in mutual funds for a few months, especially if the first 4–5 months are volatile. Vishal Chopra, Senior Vice President and Fund Manager at UTI AMC, says that volatility in the equity market is normal. Losses in the initial months are not unusual, and it is wise to continue investing during such times.
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Why investing more during a downturn is beneficial
According to experts, when the market declines, it presents a good opportunity for investors. This provides an opportunity to purchase more units at a lower price, and this strategy increases the likelihood of better returns in the long term. Investors should remain focused on their long-term goals, as the market stabilizes over time, and good-quality funds perform better.
