CURRENT market conditions have led to frantic selling by many investors. And this selling is not restricted to stocks alone.

Many investors have redeemed their mutual fund schemes and have stopped their SIPs.

wealth showed you how current market conditions work in favour of SIPs and present the best opportunity to average your cost.

But, when the going gets bad (this time it has got worse!), emotions get the better of us.

Just like it did for 31 year old Abhishek Mistry*.

Abhishek is into the business of manufacturing electronic components and stays with his wife and daughter in Mumbai. Apart from catching up with old friends and going for his regular jog, he takes a keen interest in investing in stocks and mutual funds.

In November 2007, he activated a monthly SIP of Rs 1000 into the Reliance Diversified Power Sector Fund, for a period of 5 years.

Initially, when the markets started falling early this year, Abhishek carried on with the SIP. However, when the indices fell harder, Abhishek (intentionally) defaulted on his SIP, since March 2008. None of the installments that fell on the fifth of every month got cleared. Now, he has accumulated the funds of the last eight months (Rs 8000) and wants to invest a lump sum amount, when the market has bottomed out.

He wants to know:

- Whether he did the right thing by defaulting on his SIPs when markets were falling.
- If this will hamper his credit rating with the bank.

wealth clears Abhishek’s predicament.

Read: Market crash: Tips to cut losses

Illustration: Vaibhav Shirke

*Name changed on request

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e-mail: Pooja Punjabi

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