Vaibhav Jain Shares 3 Common SIP Mistakes You Must Avoid

Have you started a Systematic Investment Plan (SIP) recently, or are you planning to begin investing soon? Finance influencer Vaibhav Jain emphasizes avoiding common investment mistakes to ensure maximum returns. By being mindful of these pitfalls, you can significantly boost your SIP gains over time. Ready to learn these simple yet crucial tips?

Mistake #1: Choosing Regular Plan Instead of Direct Plan

Vaibhav advises investors to always select direct mutual fund plans rather than regular plans. Regular plans have higher expense ratios (usually 1%–2%), whereas direct plans have significantly lower ratios (0.05%–1%). Though this might seem minor, over 10–15 years, the higher expense of regular plans substantially reduces your total returns. Choose direct plans to optimize long-term growth.

Mistake #2: Selling Mutual Funds Too Soon

Investors often withdraw their mutual funds before 12 months, unknowingly incurring high penalties and taxes. Vaibhav stresses holding your funds at least one year to avoid "exit load" charges. Additionally, after 12 months, your investment qualifies as a Long-Term Capital Gain, attracting lower taxes, thus enhancing your overall returns.

Mistake #3: Stopping SIP During Market Downturns

Many investors panic and stop SIP investments during market declines. Vaibhav highlights this as a significant mistake. Continuing SIP during downturns allows you to buy more units at lower prices, significantly boosting your future returns when markets recover. Regular investing, irrespective of market volatility, enhances long-term wealth creation.

View this post on Instagram

A post shared by Vaibhav Jain (@ca.vaibhavjain)

Vaibhav Jain's clear guidance on avoiding common SIP mistakes ensures smarter investing decisions. Following these tips will boost your returns, minimize costs, and optimize tax efficiency, helping you build lasting financial security.