Introduction: The Investor’s Dilemma
The market is down, and fear is in the air. You check your portfolio, and the numbers don’t look great. You think, “Maybe I should stop my SIP (Systematic Investment Plan) until things improve.”
Sounds familiar? Many investors panic when markets turn red, wondering if continuing their SIP is the right choice. But history and logic tell us one thing—stopping your SIP now is the biggest mistake you can make.
Let’s break this down and see why continuing your SIP during a market downturn is actually the smartest decision you can make.
Why You Should Continue Your SIP Even When Markets Are Down
1. SIP is Designed for Volatility – It’s a Feature, Not a Bug!
SIP follows the principle of rupee-cost averaging. When the market falls, your SIP buys more units at a lower price. When the market rises, those units become more valuable.
Example: Suppose you invest ₹10,000 every month. When the market is high, you may get 10 units at ₹1,000 each. But when the market falls, the same ₹10,000 might get you 12 units at ₹833 each. Over time, this balances out and smooths your returns.
If you stop your SIP, you lose the benefit of buying low and averaging out your cost.
2. Market Downturns Are Temporary, But Growth is Long-Term
Look at history. Every market downturn has been followed by recovery and growth.
2008 Financial Crisis: Nifty fell by 60%, but those who stayed invested saw massive gains as the market bounced back.
2020 COVID Crash: Nifty dropped 35% in a month, but by 2021, it hit record highs.
If you had stopped investing in these downturns, you would have missed out on the recovery. The key lesson? Downturns don’t last, but disciplined investing does.
3. Historical SIP Returns Show Patience Pays Off
Let’s take an example of a long-term SIP investor:
If you had started a ₹10,000 SIP in Nifty 50 in 2000, here’s how much your investment would have grown:
Invested Amount: ₹24 Lakhs (₹10,000 per month for 20 years)
Wealth Created: ₹1.75 Crore (Annualized Return ~12%)
Despite multiple market crashes (2008, 2011, 2015, 2020), the long-term investor benefited. Stopping SIP in downturns would have drastically reduced returns!
4. Timing the Market is Impossible – Stay Invested Instead
Most investors think, “I will stop my SIP now and restart when the market improves.” But the problem is—you’ll never know the perfect time to restart!
Fact: Studies show that even professional fund managers fail to time the market correctly. The best strategy is to stay invested and let compounding do its magic.
What Should You Do Now?
Continue your SIP. You are buying more units at lower prices.
Think long-term. Markets rise and fall, but the trend is always upward.
Ignore short-term noise. Stay focused on your financial goals.
Final Thoughts: Wealth is Built Through Consistency
Investing isn’t about avoiding downturns—it’s about staying invested through them. If you stop your SIP now, you are locking in fear and missing out on future growth. So, ask yourself: Am I investing based on emotions or logic?
The smartest investors know that the best time to invest is always now. Keep your SIP going and let your wealth grow!
Stay invested. Stay wealthy.
Leave a Reply