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Investment: Disciplined investing requires a balanced portfolio, not a multitude of SIPs.
SIPs are essential for disciplined investing. They average out market fluctuations and deliver better results over the long term.
Ashish, a resident of Noida, began investing in mutual funds as soon as he got a new job. He didn’t restrict himself to one or two mutual funds. He began 12 different mutual fund SIPs of ₹2,000 each. He thought his portfolio was quite large, as more mutual funds meant more diversification and more wealth. Most people like Ashish invest in mutual funds through SIPs. According to the Association of Mutual Funds in India (AMFI), monthly SIP investments were ₹26,400 crore at the beginning of 2025, reaching ₹31,02 crore by January 2026.
The fact is that Ashish’s portfolio is not diversified; rather, there is overlap in his portfolio. Ten out of his 12 mutual funds hold stocks of Reliance, HDFC Bank, and Infosys. This is not diversification; this is over-diversification. If the stock price of Reliance falls, all 12 of Ashish’s mutual funds will fall.
When the market volatility hit in 2025, the portfolios of those who invested only in small-caps saw the biggest declines. When the market rises, everyone appears to be a winner, but the true investor is the one whose portfolio falls the least during a downturn.
