Stay Invested: 7-Year SIPs Promise Solid Returns

Motilal Oswal recently highlighted the importance of staying invested in Systematic Investment Plans (SIPs) for at least seven years. Their analysis shows that despite market volatility, especially in small and mid-cap stocks, maintaining SIPs for this duration can yield substantial rewards.

The study examined monthly rolling SIP returns over 5, 7, and 10-year periods, covering significant market events like the 2008-09 financial crisis and the COVID-19 pandemic. The findings reveal that investors who stayed committed to their SIPs generally saw positive returns.

For mid-cap stocks, the probability of loss over a 7-year period is 0%, while for small-cap stocks, it’s just 5.8%. This means that even in the worst-case scenarios, staying invested for seven years significantly reduces the risk of losses.

The report emphasizes that patience and discipline are key. Just like in a marriage, staying committed during the initial years often brings rewarding results. So, if you’re considering SIPs, it might be worth waiting out those seven years for potentially solid returns.