India's growth story remains strong; continue with your SIP

The Indian economy is witnessing COVID-19 led disruptions while the economic activity has slowed. But while there is near term disruption, the economy is expected to bounce back in FY22. The economic growth rate is expected to recover to levels to 6.6% in FY22, according to Moody’s Investor Services. Sooner or later, the equity markets will reflect the economic recovery. Hence, this is a crucial reason to remain invested in equity markets and also to continue with Systematic Investment Plans.

There are many strong financial and macroeconomic reasons why one should continue with their SIPs:

• A market downturn is an excellent buying opportunity. As you make regular investments in equities through SIPs, mutual fund investors get more bang for the buck when equity prices are depressed.
• India’s demographic advantage translates into a considerable consumption story. With nearly 60% of India’s economy driven by consumption, the Indian market is enormous and presents investors with plenty of opportunities.
• The Indian economy has also adjusted to global challenges, such as stepping up exports of essential pharma products during the pandemic. Besides, the economy has also welcomed international companies to invest in India. Foreign direct investment in the country stood at $36.79 billion* during April-December 2019, and some high-profile global companies have announced massive investments in India recently.
• Mutual fund penetration is low but rapidly rising. The industry has about Rs 26 trillion worth of assets under management currently, which was just about Rs 7.5 trillion back in March 2010.#
• The structural reforms such as tax incentives to corporates, growing financial inclusion, and formalisation of the economy and the rising investor awareness campaigns will only help the industry grow in the coming years.

By investing with regularity, and continuing your SIPs through thick and thin, you will be participating in the Indian growth story through mutual funds. This is not the time to throw in the towel. As the Indian growth story remains on solid ground, eventually the market will rise again, and you will derive immense investment satisfaction.
Source: *dipp.gov.in, # amfiindia.com

Mutual fund investments are subject to market risks, read all scheme related documents carefully.