InvestorQ : Is it possible to lose invested money through SIP in mutual funds?
Pavithra Prabhakaran made post

Is it possible to lose invested money through SIP in mutual funds?

Answer
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4 weeks ago


Yes, it is possible. However, this not as much due to the mode of investment as it is due to the performance of the mutual fund.
Investing in mutual funds carries risk, whether you invest through SIP mode or lumpsum mode. The only thing you circumvent by investing through SIP is timing the market.

Investing in mutual funds should be done according to your risk and financial profile. Debt funds carry less risk and you can afford to invest for a shorter duration (1-3years). Equity funds, on the other hand, are very volatile. They have the scope of giving you multifold returns. Investing for a longer duration in equity funds can help buffer your returns from volatility. 

Each individual mutual fund has its own characteristics and flaws. Once you invest in a mutual fund according to your financial profile and goals, you are in a better position to review its performance and prevent or at least minimize, the loss of capital.