Keep your SIP running in corrections
Pausing a SIP during a market fall means missing the lower prices that are the chief arithmetic benefit of investing in instalments.
General investing education — not investment advice. These explainers describe concepts in plain language; they do not assess any fund, security, or person's situation. Investing involves risk, including possible loss of principal. For guidance on personal decisions, consult a SEBI-registered investment adviser.
Not investment advice.
The instinct to pause — and why it backfires
When markets fall sharply, the natural instinct is to pause or stop a SIP to 'wait for stability'. But the point of a SIP is precisely to buy during all conditions — including the uncomfortable ones.
What happens arithmetically when you pause
Rupee-cost averaging works because a fixed instalment buys more units when the NAV is lower. A correction is when NAVs are most depressed — pausing a SIP at that moment skips the months where each rupee buys the most units. By the time markets recover and the investor resumes, prices are higher and fewer units are purchased per instalment. This is a hypothetical illustration with assumed figures (authored June 2026), not a projection of any actual investment. Real returns vary and may be negative.
What a SIP pause costs (hypothetically)
Two investors both run a ₹10,000 SIP in a hypothetical fund. One pauses for 3 months during a 20% drawdown; the other continues. The one who continued bought units at depressed NAVs; the one who paused bought nothing during those months and resumed at higher prices. The exact difference depends on when and how fast the market recovers — these are illustrative assumptions, not a prediction. This is a hypothetical illustration with assumed figures (authored June 2026), not a projection of any actual investment. Real returns vary and may be negative.
Important caveat
Continuing a SIP during a correction only makes sense if the underlying scheme still aligns with your goals and if you have the financial capacity to continue the instalment. Investing beyond one's means or risk tolerance is not advised by anyone. This page explains the concept, not your personal situation.
Related concepts: SIP & rupee-cost averaging, drawdown.