Should You Halt Your SIP During A Falling Market?

SIP stoppage is normally around 50%, but it has been climbing, with 83% last month and 109% this month. This is quite concerning. It definitely shows that people who started recently are unable to accept their values declining!

13-02-2025/ THURSDAY

Lets see what an SIP investor would have experienced

"Let me tell you a story of the most brutal correction in India, it was the dot com bubble. Not only because markets corrected 54% but also because it lasted for 19 months. "

Let's take two instances....!

If you were extremely astute and began your 25,000 SIP at the exact bottom of the market cycle in September 2001, when the correction ended and the markets began to rise, and you continued to invest until December 2024, you would have invested 70 L over 280 months, which, at today's actual market returns, would have equaled 5.50 cr.

However, if you were unfortunate and began investing in February 2000, at the peak of the market cycle, when the 54% market decline began, and continued to do so until December 2024, you would have invested 74.75 L over 299 months, which, at today's real market returns, would have been 6.70 cr.

Enroll now

 Here's the lesson:

SIPs are meant to perform best in a declining market, not a rising one. You made 1.2 cr more by investing 4.75L more when you started at the top of the market where the markets corrected, as opposed to starting at the bottom.

This brilliant chart will show you how in the last 28 years, it has actually worked the same way in all large falls. If you cant time the market, stay invested!

There are two things to consider and ask yourself:

- You made better returns when you started at the top vs. bottom. So should you stop your SIP in a falling market?

- This worked because you stayed invested for a long 25 years. Are you a long-term investor?

Drop your thoughts below!

"Together let's chart our financial independence"

Gajapriya Annadurai
Full Time Trader & Investor, Founder @Stark School of Finance.

Should You Halt Your SIP During A Falling Market?

Lets see what an SIP investor would have experienced

You may also be interested in