How SIP pause during Covid boosted returns but cut my wealth

Summary: Covid didn’t just disrupt my life; it disrupted my SIP. When the Parag Parikh Flexi Cap Fund fell 24.6 per cent during early 2020, I paused my SIP out of financial stress. Ironically, that pause helped me earn a higher return on paper, but left me with a smaller corpus than if I had stayed invested. This story looks at how that’s possible.

I still remember January 1, 2018. New Year’s Day. New resolutions. And one of them was unusually sensible for my age: “No matter what happens, I will invest Rs 10,000 on the first of every month in Parag Parikh Flexi Cap.”

For two years, I stuck to it with the devotion of a yogi. Every month, without fail, Rs 10,000 went in. And then Covid happened.

When the world went into lockdown, my finances did too. Salaries were being slashed, uncertainty was everywhere, and I suddenly found myself unable to continue my SIP. Between January 1, 2020 and June 1, 2020, I paused every single instalment. Six months. Zero investments.

Ironically, this coincided with the fund’s worst-ever drawdown. It fell 24.6 per cent between January and March 2020. This was the biggest sale the market had offered in over a decade. And all I could do was window shopping.

And by the time I resumed investing in July 2020, things had stabilised. Today, looking back, I realise it was a bittersweet pause. Bitter because my corpus is lower than it should have been, and sweet because I was lucky enough to re-enter the market at the right time.

What if I hadn’t paused? The alternate universe

To really understand the fallout, I ran the numbers. Same fund. Same dates. Same Rs 10,000 SIP. Just one difference:  In Universe A, I invested every month without fail.
In Universe B (my real one), I skipped six SIPs during Covid.

Universe A: If I had continued my SIP (January 1, 2018 to December 10, 2025)

• Total invested: Rs 9.6 lakh (96 instalments × Rs 10,000)
• Final corpus: Rs 22,45,555
• Return (XIRR): 20.9 per cent

For the uninitiated, XIRR can calculate how fast our money grows each year if we invest different amounts at different times, as we do with our SIPs.

Universe B: What actually happened (I paused six SIPs)

• Total invested: Rs 9 lakh (90 instalments × Rs 10,000)
• Final corpus: Rs 21,84,497
• XIRR: 22.2 per cent

So, essentially, I earned higher returns (22.2 per cent vs 20.9 per cent) but ended up with a lower corpus (Rs 21.84 lakh vs Rs 22.45 lakh).

This sounds counterintuitive, doesn’t it?

The behavioural cost of pausing

Covid didn’t just pause my SIP. It paused my ability to buy at the market’s cheapest moment.

Those six skipped instalments, between January and May 2020, happened exactly when the fund was at its steepest fall: - 24.6 per cent. These were the months when every rupee invested would have bought more units than at any other time in years.

By not investing then, I avoided short-term fear but paid a long-term price.

This is the part we never talk about enough, because our behaviour during market stress matters as much as the fund you pick.

Even though my refund’s performance looks better on paper, the wealth I have built is still lower.

So, what did Covid really teach me?

Today, whenever markets look shaky and the news looks apocalyptic, I remember those six missed months. It reminds me of two hard truths of investing:

1. Time in the market beats timing the market.
2. And consistency in the market beats fear-based decisions.

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Also read: Pausing SIP or exiting funds today? It can erase 9% returns

This article was originally published on December 12, 2025.