INVESTOR PSYCHOLOGY IN SIP AND SWP ADOPTION: COGNITIVE BIASES AND LONG-TERM FINANCIAL OUTCOMES

Abstract

Systematic Investment Plans (SIPs) and Systematic Withdrawal Plans (SWPs) are cornerstones of contemporary wealth management and offer systematic solutions to the complexity of the financial market. Just like SIPs use rupee-cost averaging to grow your wealth, SWPs can help retirees decumulate in a sustainable manner. Behavioral barriers can prevent investment returns from matching their quantitative prowess. This research addresses a key missing piece in the study of behavioral finance by examining how cognitive biases affect the use, consistency, and effectiveness of systematic strategies, particularly in emerging countries where financial knowledge varies greatly. The study employs a robust mixed-methods approach, involving quantitative data from 500 Indian and ASEAN investors and qualitative insights from financial advisers. Using validated psychometric assessments and experimental interventions, we identified three cognitive biases