Decide the core
For most investors, a 2-fund core is enough: - Nifty 50 or Sensex index fund - Nifty Next 50 or a flexi-cap fund
Add a satellite only if you can track it: a sector/thematic fund or a focused midcap bucket (capped at 20%).
Set contribution rules
- Automate via SIP; review amounts every salary hike.
- Top-up rule: Add one extra SIP when Nifty is down >8% from its 50-DMA (behavioural nudge to buy fear).
Rebalancing cadence
- Annual check: If equity drifts >5% from target allocation, rebalance using fresh cash where possible.
- In bull runs, trim satellite first; protect the core.
Exit discipline
- Redeem only against goals or when thesis breaks (e.g., mandate change, persistent underperformance vs. category for 6+ quarters).
- Don’t exit mid-SIP because of headline risk; pause only if income is disrupted.
Tracking sheet essentials
- SIP date, amount, fund, start NAV
- Rolling 3Y and 5Y returns vs. benchmark
- Expense ratio changes and AUM
Common failure modes
- Too many funds (duplication of holdings)
- Chasing last year’s topper list
- Pausing SIPs during corrections (the time they work hardest)
SIPs are a behaviour system. Keep it boring, automated, and reviewed on a calendar, not on emotion.