SIP Mutual Funds is a very popular scheme in today's time because, in the long term, it gives an opportunity to earn very good profits. But before investing in it, investors should not forget that this scheme is market linked. Even a small mistake in it can cause you a big loss. Here know about those mistakes, due to which SIP investors may have to suffer a big loss.

If you want to start SIP, then first do research in the market and choose SIP wisely and according to your need, then invest. If you do not have information, then consult an expert in this matter. But listening to someone else and investing without any research and information can cause you a loss.

Do not invest a large amount in SIP just to earn more profit, otherwise your budget will go awry. It is also possible that you may not be able to continue your SIP for a long time. Therefore, you should decide the investment amount according to your financial condition. You get flexibility in SIP. You can stop it anytime, pause it in between and increase or decrease the amount in SIP. Take advantage of this flexibility and invest according to your pocket. Then as your income increases, increase the investment accordingly.

For profit, it is advisable to do long term SIP. There is less risk in this. You get the benefit of averaging. Also, you get the benefit of compounding. But if you have started a long term SIP, then do not stop it in between. Otherwise, you will not be able to achieve your profit target. Keep in mind that the longer you invest, the more you will get the benefit of compounding and will be able to create a big corpus.

Avoid investing all your money in a single fund. This increases the risk of your investment. Balance your investments in debt, equity and other asset classes. This will help you reduce your risk to a great extent.

Do not ignore the expense ratio before investing in mutual funds. Usually you might think that if the return of a fund is 15% or 18%, then you will also get the same benefit by investing. But this is not the case because the expense ratio comes in between. The management cost of your mutual fund is called the expense ratio. The expense ratio of any fund decides how cheap you will get a fund. A low or high expense ratio also affects your returns.

It is very important to review whatever investment you have made from time to time. If you do not do this, you may have to suffer a big loss. Ignoring the performance of the fund and the changes in the market can affect your returns.