"I reviewed 50 SIP portfolios this year. Here are the 6 mistakes I kept seeing
I have been reviewing SIP portfolios as part of my own learning journey this year. I get to see a lot of real portfolios. Not theoretical ones. Actual SIP setups that people have built over months and years.
After reviewing around 50 portfolios this year, six patterns kept showing up repeatedly. Sharing them here because most people do not realise they are making these errors.
- Triple gold overlap
Holding a Gold ETF, a Gold FoF, and a Sovereign Gold Bond at the same time. All three track the same underlying asset. You are not diversifying, you are just adding complexity. Pick one and stay with it.
- SIPs so small they cannot move the needle
Ten funds with 500 rupees each. At that size, the mental overhead of tracking ten funds is not worth it. Consolidate into 4 to 5 funds with meaningful SIP amounts. A 5000 rupee SIP in one good fund beats ten 500 rupee SIPs every time.
- No emergency fund before starting SIPs
This is the most common and most damaging one. People run SIPs with zero liquid buffer. The moment a medical bill or job loss hits, they redeem equity at exactly the wrong time, locking in losses. Rule of thumb: 3 to 6 months of expenses in a liquid fund before your first SIP.
- Chasing last year's top performer
Every year a different fund tops the return chart. Portfolios built this way end up with 12 to 15 funds, each bought in a different year for a different reason, with no overall strategy. Past returns are the worst reason to pick a fund.
- No glide path as you get older
A 25 year old and a 55 year old should not have identical portfolios. As you approach your goal, the portfolio should gradually shift from aggressive equity to more stable instruments. Most people never make this shift and take on far more risk than they realise.
- Building wealth without income protection
Seeing someone with a 40L mutual fund portfolio and zero term insurance is more common than you would think. You are building an asset while leaving your family completely exposed if something happens to you tomorrow. Term insurance is not optional if you have dependents.
These are not rare edge cases. I saw at least 3 of these 6 in almost every portfolio I reviewed.
Have you seen any of these mistakes in your own portfolio? Would love to hear what others have observed too.