The five biggest investing mistakes Indian families make
Almost none of these are about picking the wrong fund. Most are about behaviour, timing and the absence of a written plan.
28 Mar 2026 · ShiriInvest Team · 5 min read
Across the conversations we have had while building ShiriInvest, the same handful of mistakes keep showing up. They are not exotic. They are repetitive, expensive, and largely behavioural.
1. Mixing protection with investment
Endowment, money-back, ULIPs sold as “savings cum protection” plans. Premium goes out, the cover is small, the returns are modest, and surrender penalties trap you for years. We cover this in detail in Term insurance vs endowment — it remains the most expensive single mistake in most households.
2. Stopping SIPs in market corrections
The whole point of an SIP is that it buys more units when prices fall. Pausing the SIP in a -25% year is exactly the opposite of what the structure rewards. It happens anyway because the financial pain is real and the news cycle is loud.
The fix: tag SIPs to specific 10+ year goals. When the goal date is in 2038, a temporary dip in 2026 stops feeling like a tragedy.
3. No emergency fund, then “breaking” a long-term SIP for short-term shocks
Medical bills, a car breaking down, a six-month job gap. Without an emergency fund, the money comes out of the nearest accessible long-term investment — usually equity, usually at exactly the wrong time. Build the emergency fund first. Everything downstream gets safer.
4. Owning 15 mutual funds because each looked good when it was bought
The result is overlap (every fund holds the same top 30 stocks), over-monitoring (15 funds need 15 reviews), and no clear connection between any specific fund and any specific goal.
A working portfolio for most families: 2–3 diversified equity funds, 1–2 debt funds, possibly a hybrid for medium-term. Plus PPF, NPS, EPF for retirement tax wrappers. That’s it.
5. No written plan at all
The single most common gap. People know their salary, vaguely know their goals, vaguely know their investments — but nothing is tied together on a page that they revisit.
A written plan that defines your goals, target corpus, target year, and the monthly SIP funding each one is what turns “saving for the future” into “on track for child’s education, ahead on retirement, behind on the home down payment”.
What helps
Almost none of the fixes are sophisticated:
- Have a written goal list and look at it twice a year.
- Automate SIPs and forget them.
- Keep an emergency fund.
- Buy term + health, not endowment.
- Use professional curation if you don’t have time to do all this yourself — or DIY direct plans if you do.
Investing isn’t won by being smart in any single decision. It’s won by being consistent enough over decades that small advantages compound into large outcomes.