Why continue investing through SIPs in a volatile market?

Ans: Hello,

Continuing to invest through SIPs (Systematic Investment Plans) in a volatile market can be a prudent strategy for several reasons, especially in the context of the Indian stock market:

Rupee Cost Averaging: SIPs allow investors to buy more units when prices are low and fewer units when prices are high. This averaging effect can potentially reduce the overall cost of investment over time, mitigating the impact of market volatility.
Disciplined Approach: SIPs encourage a disciplined approach to investing by automating the investment process. Investors commit to investing a fixed amount regularly, regardless of market conditions, which can help avoid emotional decision-making during periods of volatility.
Long-Term Focus: Investing through SIPs is ideal for investors with a long-term investment horizon. While short-term market fluctuations can be unsettling, they are often smoothed out over the long term. By staying invested through SIPs, investors can benefit from the compounding effect and the potential for higher returns over time.
Opportunity to Buy Low: Volatility in the market presents opportunities to buy quality stocks at discounted prices. SIP investors can take advantage of these market dips by continuing to invest regularly, potentially enhancing their portfolio's overall returns when the market rebounds.
Diversification Benefits: SIPs allow investors to spread their investments across different market segments and asset classes over time. This diversification can help reduce overall portfolio risk and enhance long-term returns, even in a volatile market environment.
However, it's essential for investors to review their investment objectives, risk tolerance, and financial goals periodically, and consult with a qualified financial advisor to ensure that SIPs align with their overall financial plan. Additionally, investors should be prepared for short-term fluctuations and exercise patience during periods of market volatility.

Ans: Worrying about your SIPs in such times is natural. It shows that you are alert and serious about your money.

The market is reacting to global news like Trump tariffs. Volatility is rising. But stopping SIPs during such periods may cause more harm than help.

Let’s evaluate this from all sides.

» Market Volatility Is Normal and Temporary

Markets never move in a straight line.

Political news and global issues create short-term panic.

But this panic does not last long.

After every fall, markets have always recovered.

Volatility is the price for long-term gain.

Tariff news is a short-term trigger. It should not impact your long-term SIP strategy.

» Stopping SIP During Volatility Hurts Long-Term Growth

SIP is meant to work in volatile markets.

When markets fall, SIP buys more units.

This lowers your average cost.

You gain more when markets rise again.

If you stop now, you miss that benefit.

Stopping SIP now is like pausing the engine during a flight. It delays your journey.

» You Are Investing for Long Term, Not for a News Event

SIPs are not for weeks or months.

SIPs are for 10 to 15 years or more.

One tariff or one election cannot ruin your plan.

Don’t take long-term decisions based on short-term news.

Ignore the noise. Focus on your long-term goals.

» Market Falls Are a Friend, Not an Enemy, for SIP

Market dips give you cheaper NAV.

You get more units for the same amount.

This boosts your long-term return.

SIPs work best when markets are not stable.

Volatility is the key ingredient of SIP success.

» Historical Proof: SIPs Reward Long-Term Investors

Past shows that SIPs always delivered in the long run.

Even if you had started before a crash, staying invested worked.

Investors who continued SIP during crisis gained the most later.

History favours those who don’t panic.

» Don’t Try to Time the Market

Timing the market is nearly impossible.

Even experts get it wrong.

If you stop now, when will you start again?

What if the market rises next month?

You’ll miss the rebound and regret the pause.

Consistency beats timing in mutual funds.

» Do a Quick Portfolio Check Instead

Review your fund choices.

Check if your SIP funds are still performing reasonably.

Ensure your SIP goals are long-term.

If yes, then just stay invested.

No need to exit or switch because of news.

Review, but don’t react emotionally.

» If You Have Extra Money, Increase SIP Now

Falling market gives better entry points.

If your income allows, top-up your SIP slightly.

This increases long-term gains.

A small step now can give big returns later.

Market dips are not danger signs. They are buying opportunities.

» Avoid Watching Market News Every Day

Too much news increases fear.

Fear leads to wrong decisions.

Stop tracking SIP performance daily.

Check only once every 6 or 12 months.

Discipline is more important than daily tracking.

» Don’t Shift to Index Funds Now

You may hear people talking about Nifty ETFs or Index Funds.

Avoid them for these reasons:

Index funds follow the market blindly.

They fall fully during a crash.

No fund manager to protect your capital.

No flexibility to switch between sectors.

No scope to beat market in long run.

You are better off with actively managed funds.

» Stay With Active Funds Through CFP or MFD

If you are using direct plans, be careful.

No expert to guide you in market crashes.

No review or rebalancing.

You may stop SIPs or exit at wrong time.

You may miss compounding due to fear.

Invest through regular plans with Certified Financial Planner.

That support is valuable during market stress.

» Have Emergency Fund So You Don’t Panic

Keep 4–6 months expenses in a separate fund.

Don’t use SIP money for emergencies.

SIPs are for wealth creation only.

Emergency fund protects your SIP from being broken.

Peace of mind helps you stay invested calmly.

» Think Like a Marathon Runner, Not a Sprinter

SIP is not a race for next month’s return.

SIP is like sowing a tree.

It grows slowly, then faster over time.

Market weather will change. Stay rooted.

Patience is your most powerful asset.

» Steps You Can Take Today

Continue all your existing SIPs without stopping.

Add a small top-up if you have surplus.

Avoid watching market news every day.

Don’t change funds just because of tariffs.

Review SIP portfolio only once a year.

Keep insurance and emergency fund in place.

Talk to your Certified Financial Planner if you feel anxious.

Staying calm is also a financial skill.

» What You Must Avoid Now

Don’t stop SIP due to fear.

Don’t switch to FDs or cash.

Don’t follow social media panic posts.

Don’t compare SIP returns every week.

Don’t take advice from unqualified people.

Fear-based decisions often cost more than market fall.

» If You Hold LIC or Traditional Plans

If you also hold LIC endowment, ULIPs, or money-back policies:

Review them now.

These give poor returns with lock-in.

Surrender if the policy is 3+ years old.

Reinvest the money into mutual funds.

Mixing insurance and investment slows wealth creation.

» Final Insights

You are already on the right path. SIP is your long-term wealth builder.

News like tariffs and elections come and go. Your goal stays the same.

Don’t stop the journey midway.

This is the best time to stay invested. Even increase if possible.

Ten years later, you’ll thank yourself for not giving up now.

Best Regards,
K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

https://www.youtube.com/@HolisticInvestment