Excellent Time for Retail Investors

Though the mar kets have been volatile for several months, 99 per cent retail investors have stayed invested continuously in the systematic investment plans (SIPs) which has given hope to the industry which has been facing redemptions by corporates. Mr A. P. Kurian, chairman of Association of Mutual Funds in India (AMFI) said this indicates the maturity on the part of the investors.

Till March 2005 only 1.79 lakh SIPs were sold to the retail investors and that number has crossed the 40 lakh mark in September 2008, he added. Mr Sudeep Bandopadhyay, CEO of Reliance Money said, “Though the capital market has dipped by about 50 per cent in the last nine months, we have experienced that the investors have not become panicky and prefer to keep on purchasing the units on a monthly basis.” He said, “ The SIPs prove to be beneficial in a volatile market as you get more units when the market is at the bottom level, and it seems that retail investors have understood this fact.” He also said, “Reliance Money has sold about four lakh SIPs of different mutual funds in the last one year. When big-ticket investors including the corporates prefer redemption these small-ticket SIPs did not put that pressure.” He added, “Normally SIPs are planned with a horizon of three to five years and investors are psychologically prepared to face the ups and downs. That could be the reason why this segment did not see panic among the investors.”