I almost hit pause on my systematic investment plan

Summary: When markets fall, even the most disciplined investors can feel shaken. This relatable story captures the emotional roller-coaster of investing through a downturn and how sticking with your SIP during rough patches can quietly set you up for long-term success. A must-read for every investor.

When the markets fell sharply last year, so did my confidence. One minute, I was proudly telling friends I had a systematic investment plan (SIP) running like clockwork. The next, I was hovering over the “cancel” button, wondering if I should stop and cut my losses.

I had started the SIP a couple of years ago after hearing colleagues talk about “long-term wealth creation”. It sounded responsible and adult-like. I didn’t obsess over the markets. I just picked a date, set an amount, and forgot about it. For a while, it was smooth sailing. The value of my investments inched up every few months. I even allowed myself a small, smug smile whenever I checked my statements.

Then the headlines changed. Inflation was up. Global events triggered panic. The market started dipping, and every news alert made it feel like the floor was slipping beneath my feet. My SIP statement looked redder each month, and for the first time, I noticed the “current value” column. It was lower than what I had put in. That sinking feeling is hard to describe. I thought, “Why keep throwing money into something that’s falling?”

One evening, I called a friend who had been investing longer than I had. I expected him to confirm my fears. Instead, he laughed. “This is exactly when your SIP is doing the heavy lifting,” he said. I didn’t understand at first.

He explained rupee cost averaging, i.e., how continuing to invest during downturns helps you buy more units at cheaper prices, which smooths out the impact of volatility over time. “It feels like you’re losing money,” he said, “but these phases are when you’re planting the seeds for future gains.”

I didn’t stop my SIP. I decided to ignore the news and let it run in the background, as it had before. A few months later, the markets recovered. The red turned orange, then green. I realised that my SIP had bought units at bargain prices during the dip. My overall returns were better than before, all because I didn’t panic.

Conclusion

Market volatility should be seen as a natural part of investing, not a trigger to exit. Pausing SIPs during downturns can interrupt the benefits of rupee cost averaging and long-term compounding. Staying consistent through different market cycles allows investors to accumulate more units at varied price points, potentially enhancing returns when markets recover.

Wealth creation is less about predicting short-term movements and more about disciplined investing over time. By maintaining SIPs through both highs and lows, investors give themselves the best chance to benefit from the power of time in the market.

Stay the course. Let your SIPs do the work.

Market dips can rattle even the most committed investors. But staying invested through volatility is where SIPs shine—buying more when prices are low and compounding over time.

With Value Research Fund Advisor, you get analyst-approved fund recommendations designed to help you build wealth steadily—through ups, downs and everything in between.

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