If we look at the data so far this year, both mutual funds and the stock market have seen a boom. Not only have the Sensex and Nifty made new highs, but the number of people investing in mutual funds has also seen a huge jump. This is the reason why investment in equity mutual funds has increased by 3% to Rs 38,239 crore in August. It was Rs 37,113 crore in July. At the same time, investment in sectoral and thematic funds has decreased by 1% to Rs 18,117 crore.

It is not that this boom has been seen only in mutual funds. You can look at today's market data. When the market opened in the morning, the market was flat, but by the time it closed, the Sensex crossed the level of 85300 and the NSE Nifty reached 26,056. Let us tell you that this is its lifetime high level. Now the most important question here is arising for those small investors who are thinking of entering the market now. Should they start SIP now? Let us understand about it.

Is now the right time for SIP?

If you are thinking of investing in SIP and are confused about whether you should invest in the current boom in the market or wait for the fall, then the simple answer is that waiting is not the right decision. There are two reasons behind this. First, the Reserve Bank of India has not made any major increase in interest rates for some time, which is positive for equity and bond funds. Low interest rates attract investors to the stock market and mutual funds, especially at a time when bond yields are getting limited.

The second reason, is if you start SIP today and your target is to invest for the long term, then if the market is bullish today and you buy the NAV or Net Asset Value of a mutual fund, it is just like when you buy shares of a company. So its price will also be affected by the fluctuations in the market. But it will not cause any loss in the long term. I will explain it with an example.

Suppose the price of a NAV is 20 rupees right now and you invest 500 now, then as it increases, your returns will also increase and if it falls, then when you invest 500 rupees again next month, it will be averaged. That is, overall starting SIP now is the best decision for the long term.

Which sectors should you focus on?

Now it becomes important to understand which sectors should be invested in. The report of the Global Invest website says that investments in sectors like telecom, IT, and pharma are increasing in Indian mutual funds. Especially in the IT and healthcare sectors, there are possibilities of better returns for investors, as long-term growth is expected in these sectors.