Hold on to SIPs in Covid crisis: Report

As the economy goes through an unprecedented slowdown severely impacting the income levels and personal finance of individuals, a white paper by ClearTax has suggested that people should continue to invest through systematic investment plans (SIP) and not halt or exit them amid the crisis.

It said that the current market scenario is conducive to invest in equities as the stock prices have fallen to their multi-year lows. Entering the market now and staying invested for a long period of time would help investors create wealth, the whitepaper said.

The online survey by ClearTax showed that 54.5% of the responses received said that this is not the right time to invest in SIPs. The white paper titled "Covid-19: Impact on investing" said that thousands of investors exited their investments due to severe financial constraints.

"We conducted a survey and an astounding 54.5% of the responses said that they believed this was not a good time to invest, even though most experts have recommended investors to increase or at least continue SIPs.

Remaining 45.5% have increased their SIPs to make the most of the falling markets," it said.

Noting that investing in equity markets comes with some inherent risks, the white paper said that many investors tend to make the mistake of making an exit during a crisis.

It said that Indian stock markets have witnessed several crises in the past and have emerged from those.