Should Investors Stop SIPs as Equity Markets Witness a Crisis?

Praveen Vikkath

The Indian stock market has been witnessing persistent selling pressure since the war broke out in West Asia. Benchmark indices Sensex and Nifty 50 have corrected by more than 9% since the onset of the US-Iran conflict on February 28, 2026, amid surging oil prices and heavy foreign investor selling.

Markets have shed over ₹40 lakh crore in market capitalisation, with the Sensex falling below 74,000 and the Nifty testing lower levels due to rising geopolitical risks. Many investors who were previously enthusiastic about equities have now become sceptical and have stopped their SIPs (Systematic Investment Plans). However, experts strongly urge investors to stick to their long-term plans rather than exit in panic, explaining how SIPs can act as a shield during uncertain times.

Why Panic Happens During Market Corrections

It is natural to feel anxious when markets fall sharply. However, this is also the time to rely on the basic principle of investing — market corrections allow fund managers to buy more units at lower prices and potentially sell them at higher prices when markets recover.

Several factors often push investors toward panic selling:
• Outperformance of other asset classes
• Cash-flow issues affecting SIP continuity
• Lack of awareness about market cycles and volatility
• The misconception that SIPs are short-term trading tools rather than long-term investments

Stopping SIPs prematurely can lead to redemption costs and, more importantly, the loss of compounding and rupee-cost averaging benefits.

The Cost of Stopping SIPs Early

Consider a monthly SIP of ₹75,000 growing at a 15% CAGR:
• After 3 years: ₹27 lakh invested → ~₹34 lakh value
• After 20 years: ₹1.8 crore invested → ~₹9.97 crore value

If the investor stops investing after 3 years, the potential long-term wealth loss could be as high as ₹9.63 crore. This highlights the importance of consistency and patience.

How Step-Up SIPs Boost Wealth Creation

Step-up SIPs help investors increase their contributions annually.

Example:
A 15-year SIP of ₹5,000 per month
• Total investment: ₹9 lakh
• Final value: ~₹24 lakh

If the SIP amount increases by 10% every year, the final corpus can grow significantly higher. Step-up SIPs are especially useful for salaried professionals, young investors, and late starters trying to accelerate wealth creation. However, they may not suit self-employed individuals with unstable income.

Be Patient: SIPs Are a Long-Term Strategy

SIPs usually start delivering meaningful results after 7–10 years. Investors should avoid taking advice from unqualified sources, stop obsessing over daily market movements, maintain realistic return expectations, and focus on goal-based investing such as retirement or education. A goal-oriented approach helps investors avoid being influenced by short-term market noise.

How to Turn SIPs into Extraordinary Wealth

Experts recommend starting early to benefit from compounding, increasing contributions gradually, maintaining asset allocation through periodic rebalancing, and choosing high-quality funds with strong risk management. Staying disciplined and committed to long-term investing remains the most effective wealth-building strategy.

Disclaimer:
This article is for informational and educational purposes only and should not be considered financial or investment advice. Investments in the stock market and mutual funds are subject to market risks, including the possible loss of principal. Past performance is not indicative of future returns. Readers are advised to consult a qualified financial advisor before making any investment decisions.