There’s a quiet kind of pride that comes with running SIPs. You tell yourself you’re doing the right thing. That you’re “disciplined.” That one day, this monthly debit will morph into a mountain of wealth.
But here’s the thing: not all SIPs decisions are wise, and not all discipline is productive.
SIPs (Systematic Investment Plans) are just a method of investing. A way to automate consistency. But they are not a strategy. They’re not a product. And they certainly aren’t a guarantee of success.
If you haven’t thought about why you’re doing the SIPs or how they work, you might be on money cruise control. This can lead you off course.
Here are four red flags that signal your SIP is no longer a sign of smart investing, but a symptom of lazy or misplaced conviction.
#1. You Add a New SIP Every Time You Have Surplus Funds
You got a bonus. Or maybe a tax refund. Or a freelance payment on the side. And your first thought is: “Let me be responsible. I’ll start another SIP.”
Pause right there.
This reflexive behaviour feels noble, but it’s not investing; it’s hoarding in disguise. Each new SIP starts as a gesture of good intent. But over time, you’re left with 7–10 SIPs across half a dozen AMCs if not more. And worse, none of these are monitored actively by you.
This isn’t a diversified portfolio. It’s a pile of digital paperwork.
Your portfolio becomes bloated, redundant, and harder to manage. You can’t even tell if your new SIP is overlapping with an old one (most likely it is). Are you doubling down on the same midcap stocks in three different funds? Are you spread so thin that your best-performing SIP has no weight?
The wealth you build is not about how many SIPs you run. It’s about the quality of your allocation.
Next time you receive a windfall, ask:
- Does this SIP align with a specific goal? Would I be better off just increasing the SIP amount in an existing fund.
- Is my existing portfolio underweight in a particular asset class?
- Would a one-time investment in an existing fund make more sense?
Top-ups, not clutter, are the mark of a savvy investor.
#2. You Switch or Add SIPs Every Time a Hot Theme Hits the Market
When was the last time you added a SIP and why?
If it was because your friend said “Defence funds are booming,” or your advisor pitched the latest “Railway Revival” fund, we have a problem.
Investors are chasing everything from PSUs to EVs to AI. And while themes can offer bursts of alpha, most are cyclical, timing-sensitive, and highly volatile.
Worse, investors often dump their old SIPs to ride the new wave. Midcap out, defence in. Pharma out, smallcap in. It’s musical chairs with your long-term money.
Here’s the bitter pill: If your SIP habits change with every market trend, you’re not an investor. You’re just a trend follower on EMIs.
If you’re buying what’s hot now, ask yourself: Did you buy the last hot trend? Where is that fund now?
Thematic funds should never be more than 10–15% of your portfolio. For many, that number is probably 0%. But if they occupy half your SIP book, you’re not diversified. You’re a short term gambler, not an investor.
#3. You Think SIP Itself Is the Investment
This one’s more common and more dangerous than you’d think.
Talk to ten first-time investors, and you’ll hear this: “I’ve started SIPs.” But ask where the money goes? Silence.
Many treat SIP like a product. As if SIPs magically produce wealth. They don’t. SIP is just a mechanism. The actual investment a mutual fund is what determines your returns, risk profile, and tax implications.
So, what are you investing in?
- Is your SIP going into a small-cap fund at the market peak?
- Are you invested in long-duration debt funds while interest rates are rising?
- Is your tax-saving SIP (ELSS) overlapping with your other equity funds?
A SIP in a misaligned product is like regularly depositing money into a leaking jar. You feel good, but you’re not getting anywhere.
It’s time to stop saying “I do SIPs” and start asking, “Where is my money actually invested, and why?”
#4. You’re Paying Commissions But Getting No Advice
Let’s talk about the real cost of SIPs,and it’s not the monthly debit from your bank.
If you’re investing in a regular plan of a mutual fund, you’re paying your distributor a commission, typically 0.5%–1% annually (could be more, or less). Over 20 years, that’s not chump change.
A fund targets 12% returns. If you invest ₹10,000 monthly through a regular plan for 30 years, after distributor charges, it would grow to about ₹98.4 lakh. In the direct plan of the same fund, you will pay fewer costs. This means your corpus could reach ₹1.13 crore. That’s a significant difference of ₹14.6 lakh, just by choosing direct.
Now ask yourself: What are you getting for that commission?
If your distributor isn’t:
- Doing quarterly reviews of your portfolio.
- Helping you realign based on market cycles.
- Guiding you on taxes, rebalancing, and goal planning.
… then you’re donating money for zero value.
This is like paying for a gym membership and never getting a trainer, plan, or even a towel.
Loyalty is fine. But blind loyalty to an advisor who doesn’t show up in market crashes is expensive.
You have two options:
- Ask your distributor for a service commitment. This should include quarterly portfolio reviews, calls during market stress, and rebalancing reports.
- Or switch to direct plans through AMC websites. This will involve taxes. So, perhaps your incremental investments could be in direct plans.
A Final Question: Is Your SIP Habit Helping You or Holding You Back?
We romanticise SIPs in India. They’re hailed as the best way to beat market volatility. And to be fair, they are powerfulif used right.
But that’s a big “if.”
If your SIPs are born out of impulse, FOMO, or lack of knowledge, they won’t save you. They’ll only give you the illusion of financial progress while leading you nowhere in particular.
Real wealth doesn’t come from blind automation. It comes from intentional choices. From knowing when to say yes and when to stop.
It might just be time to re-evaluate your SIPs before they stop being a tool and start becoming a trap.
Chinmayee P Kumar is a finance-focused content professional with a sharp eye for investor communication and storytelling. She specializes in simplifying complex investment topics across equity research, personal finance, and wealth management for a diverse audience from first-time investors to seasoned market participants.
Disclaimer: The purpose of this article is only to share interesting charts, data points, and thought-provoking opinions. It is not a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educational purposes only.