SIP Stoppage — The Worst Decision in a Volatile Market
As equity markets gyrate on the daily news flow from the US-Israel-Iran conflict, financial advisers across India are fielding calls from anxious investors wanting to pause or stop their Systematic Investment Plans. The near-consensus view from certified financial planners: stay the course.
The Math of Market Downturns
"Every significant market drawdown in SIP history — 2008 global financial crisis, 2013 taper tantrum, 2020 Covid crash, 2022 rate hike panic — produced better-than-average returns for investors who continued their SIPs through the low period," said Nitin Kamath, founder of Zerodha, in a widely shared note on March 10. "The rupee-cost averaging that happens during a correction means you're buying more units at lower prices."
A simple calculation illustrates this: an investor with a ₹10,000/month SIP in a diversified equity fund who paused during the 2020 Covid crash (March–June 2020) missed acquiring units at 30–40% discounts. The same investor who continued through the crash saw their portfolio perform 18% better over the following two years than a comparable investor who stopped.
Current SIP Data
AMFI reported that mutual fund SIP contributions reached ₹26,300 crore in February 2026, a new monthly record, indicating that the bulk of systematic investors are not panicking. SIP accounts have grown to 9.8 crore — nearly 100 million individual SIP mandates. The resilience of SIP flows relative to FPI outflows has been a notable feature of Indian market dynamics in this correction.
What to Do Instead
CFPs recommend that investors who feel uncomfortable with current volatility should: (1) check their asset allocation and rebalance if equity weights have drifted significantly; (2) if they have idle cash, consider a lump-sum addition to existing SIPs in equity funds — but not more than 5–10% of portfolio size; (3) avoid news-driven investment decisions.