Guide
A crash is the moment a SIP is most tested — and, historically, often the moment it quietly does its best work. Here's the reasoning.
When prices fall, your fixed monthly amount buys more units. That's rupee-cost averaging working in your favour: you're accumulating more of the asset at lower prices, which can lower your average cost.
Investors who keep their SIP running through a downturn are buying through the cheap months — the very months that, in past recoveries, did a lot of the heavy lifting for long-term returns.
The instinct in a crash is to stop investing until things 'settle'. The difficulty is that market bottoms are only obvious in hindsight, and the strongest rebound days have historically clustered near the worst days. Pausing risks missing the recovery you were waiting for.
Our missed-SIP and delay-cost tools illustrate, in rupee terms, how skipped or delayed instalments can erode a final corpus — often by far more than the amount skipped.
This reasoning assumes your goal is still long-term and the money isn't needed soon. If your horizon has shortened, or the funds are earmarked for a near-term need, the calculus changes — a crash close to a goal date is a genuine risk, not just noise.
It also assumes the underlying fund remains sound. Continuing to invest doesn't rescue a poorly chosen fund.
The hardest part of investing through a crash isn't analytical, it's emotional. The whole point of automating a SIP is to keep the decision out of the hands of a frightened version of yourself.
This is educational information about general patterns, not advice on what to do with your money. Consult a SEBI-registered investment adviser for your specific circumstances.
Try the tools