What’s in the blog?
This blog explores why many investors pause their SIPs during market downturns and how that one decision can impact long-term wealth. It explains the behavioural triggers behind such choices, the financial cost of stopping, and why staying consistent through volatility often leads to stronger, more rewarding outcomes.
Table of Contents
According to AMFI data, more than 1.12 lakh SIPs were discontinued in 2025.
And believe me, this is not just another number; it reflects the mindset of an average investor who panics when markets fall. This is especially true for those who don’t have anyone to guide or hold their hand during tough market phases.
We all know, the year 2025 was nothing short of a roller-coaster ride for investors. I’ve personally witnessed the fear and confusion when portfolios turned red. Our team received countless calls from investors asking just one question — “Should we stop our SIPs?”
We spent days conducting formal and informal awareness sessions, helping investors understand one simple truth: Stopping SIPs during market corrections can cost you far more in the long run than the temporary dip you see today.
This blog is a gentle reminder of why staying invested matters more than ever when markets fall.
Why Do Investors Stop or Want to Stop SIPs During Market Corrections?
When the market falls, it’s not just the numbers that drop… investors’ confidence drops too. People invest in the markets to make their money work for them. And when the market starts going down and the portfolios start turning red, people start judging their decisions. After all, no one puts their hard-earned money to lose it in the market.
In such situations, self-doubt starts creeping in. Investors start questioning their decisions –
“Did I pick the wrong fund?”
“Should I even invest in the market?”
“Isn’t a fixed return instrument a better option?”
This self-doubt, this hesitation, is completely human. All one needs in these times is someone who knows the market and can assure them that everything is fine, even though it doesn’t seem like it is.
I’ve seen this in action many times. Clients who were moments away from pausing their SIPs chose to stay invested after just one honest conversation. Some even had the courage to invest additional amounts during the dip and later thanked us for encouraging them to stay disciplined.
What Really Happens When Investors Stop SIPs?
Now, you might think, what’s the loss in pausing SIPs when the portfolios are turning red? Why do we suggest that our clients stay invested even when the market is volatile?
It is because pausing an SIP, especially during a market correction, comes with several consequences.
- The first thing that happens when you stop your SIP is that you lose the advantage of consistency. SIPs are designed to work on discipline, not timing. When you break that rhythm, you lose the very essence of what makes SIPs so powerful… their ability to average out market ups and downs automatically.
- Secondly, you miss the opportunity to buy at lower prices. When the market corrects, the NAV of mutual funds falls. This means the same ₹5,000 that earlier bought you, say, 200 units, could now buy 220 or 230 units. By stopping your SIP during that period, you’re effectively saying no to buying good quality investments at a discount.
- And then comes the most invisible yet most damaging effect… you interrupt compounding. Every SIP instalment doesn’t just add to your investment; it adds to your time in the market. The longer your money stays invested, the more it compounds. When you skip or stop SIPs, you’re not just missing an instalment, but you’re slowing down the future growth of your portfolio.
So while stopping SIPs might feel ‘safe’ in the short term, in the long run, it quietly reduces the very growth you were investing for.
Why Continuing SIPs Matters
If stopping SIPs during a correction can quietly hurt your long-term returns, continuing them can do exactly the opposite. It can set you up for long-term success.
Let’s understand this in a little detail, how staying invested works to your advantage.
Rupee Cost Averaging Turns Volatility into Opportunity
When you continue investing through volatile markets, you buy more units when prices are low and fewer when prices are high. This is known as Rupee Cost Averaging (RCA).
Example:
If you invest ₹5,000 every month in a mutual fund:
- When NAV = ₹25 → you get 200 units
- When NAV = ₹22 → you get 227 units
During a downturn, you accumulate more units for the same amount, which lowers your average cost and sets the stage for higher returns when markets recover.
In simple words, market corrections are a discount season for long-term investors.
The Magic of Compounding Works When You Stay Invested
The tools of SIPs are designed specifically to take advantage of compounding, and compounding needs time as well as consistency.
When you pause or stop SIPs, you don’t only lose the additional units accumulated at lower NAVs, but also the compounding potential of those units in future years.
For mid-cap and small-cap mutual funds, compounding typically shows its magic after 5–7 years. Discontinuing midway interrupts the very process that creates wealth.
Discipline Beats Motivation (in Finance too!)
You must have heard that discipline beats motivation, and this is true in personal finance as well. Lots of people pause their SIPs, thinking that they will resume once the market starts acting the way they want. But, practically, once the habit of investment gets derailed, it’s really tough to get back on track.
Investment works best when you keep saving and investing as a discipline. Relying on motivation is a dangerous decision that often keeps people in the loop of spending and taking care of ‘extra expenses’. And seriously, we seldom get surplus funds for investment unless we intentionally invest before spending.
How to Stay Disciplined During Market Corrections?
According to me, this is the most important part of this blog. Knowing it theoretically that one needs to stay disciplined with their investments even in the volatile market is one thing, and actually doing that when the time comes is another thing.
Market corrections can shake even seasoned investors. But discipline isn’t about ignoring your emotions; it’s about managing them better. Here are a few ways you can stay calm and consistent when markets turn volatile.
Don’t Check Your Portfolio Too Often
When the market is falling, your portfolio will reflect it, and that’s okay. Constantly checking your portfolio only amplifies the fear.
In fact, if you are a long-term investor, you do not need to check your portfolio frequently, even in a booming market. Instead, make it a rule to review your portfolio once a year, or when there’s a major change in your financial goals.
Markets move daily. Your goals don’t. And, your investments need to be in sync with your goal, not the market’s daily movement.
Revisit Your Goals, Not the Market
This can be seen as the continuation of the previous point. When you started your SIP, you did it for a reason… maybe your child’s education, your retirement, or financial independence.
During corrections, remind yourself of that goal. If your investment horizon is five or ten years, a few months of volatility don’t change the destination. They’re just part of the journey.
Stay Informed, But Filter the Noise
Now, I’m not saying that you should not be aware of what’s going on in the market. You should but smartly.
In times of uncertainty, everyone suddenly becomes a ‘market expert.’ Social media headlines, random predictions, and WhatsApp forwards often do more harm than good.
If you truly want to stay informed, rely on credible, data-backed sources. Awareness brings clarity.
Trust the Process
Corrections are temporary; discipline is permanent. You can check the data; every market downturn in history has eventually turned into an opportunity for long-term investors.
If you stay consistent during difficult times, you’ll thank yourself later, not just for the returns, but for the confidence you built along the way.
Insightful Experience
One of our clients, a young mother, had started an SIP a couple of years ago with a very clear goal to build a fund for her two-year-old son’s higher education. She’s the kind of investor who likes to stay closely involved. She keeps checking her portfolio regularly, tracking every rise and dip.
In the early phase of her investment journey, the markets were strong. Her portfolio showed encouraging returns, and she felt elated.
When the markets corrected in September–October 2024, that confidence quickly turned into anxiety. Her SIP, which had been growing steadily, suddenly showed negative returns. She reached out to us asking the question many investors do in such times — “Should I stop my SIP?”
We sat with her, revisited her goal, and reminded her that her investments were chosen keeping a long-term horizon in mind. We reminded her of why she started in the very first place.
That gentle reassurance was all she needed. She stayed invested, continued her SIP through the downturn, and today, as the markets have recovered, her portfolio has not only bounced back but is growing steadily again.
When we spoke recently, she said something that stayed with me: “I’m so glad I didn’t stop that SIP. I would have lost more than just returns — I would have lost my peace of mind.”
My Take
Trust me when I say this – Market tests patience before it actually rewards you as an investor. Corrections come as an interval in the market that separates impulsive investors from disciplined ones. The investors who hold on during tough phases often come out stronger, not just financially but mentally too.
Wealth creation is not a sprint. It is a marathon that requires patience and perseverance. So rather than fearing market corrections, use them to re-evaluate your goals, understand your risk tolerance, and strengthen your conviction in long-term investing.
And if ever the noise gets too loud, or the doubts start to creep in, reach out to us at MoneyAnna. We’re here not just to manage portfolios, but to help you stay the course when it’s hardest to do so.
Frequently asked questions (FAQ)
Sure. If you have extra funds at your disposal, you can do a SIP top-up to accumulate more units at lower prices and accelerate long-term growth.
Yes. If you look at SIP returns after major corrections — 2008, 2013, 2020 — investors who continued or added during those times saw significantly higher long-term returns compared to those who stopped. Market dips have always been followed by recovery phases, and SIP investors benefit automatically from that cycle.
Start small, but start soon. Don’t wait for the market to look stable. Instead, restart your SIPs immediately, even with a smaller amount. The sooner you restart, the less compounding time you lose.
That’s a valid concern. Not every dip is a market dip; sometimes, a fund can genuinely lose its edge. The key is to review performance relative to its benchmark and category peers. If your fund has consistently lagged over multiple years, even when the market has recovered, it may be time to re-evaluate. Patience is good, but blind patience isn’t.
