Market at record highs? Is this the best time to start your SIP? Expert breaks it down

With Indian stock markets touching new highs, many investors are hesitant, worrying that it may not be the right time to begin a Systematic Investment Plan (SIP). But experts say this fear is misplaced. According to Dhirendra Kumar, CEO of Value Research, market highs are not a signal to stop — but an opportunity to start.

“Markets are always either too high or too low — that uncertainty never goes away,” says Kumar. “If you believe India will be a stronger, bigger, and more efficient economy in the next 10 or 20 years, then short-term fluctuations should not stop you. The trick is to get out of this loop and just start.”

Starting at highs vs lows

A new analysis by WhiteOak Capital supports this view. The study found that starting an SIP at the top of a market cycle can actually lead to higher absolute wealth creation in rupee terms than starting at the bottom — even if the latter yields marginally higher percentage returns.

The report illustrated this with an example: an investor who began a ₹10,000 monthly SIP in January 2008, right before the global financial crisis, would have accumulated ₹79.43 lakh by October 2025. In contrast, someone who started the same SIP in March 2009, at the market bottom, would have ₹68.07 lakh, despite similar annualised returns of about 13%.

The reason, WhiteOak Capital explains, is simple: time in the market matters more than timing the market. Money that starts compounding earlier has a longer runway to grow. Delaying investments in search of a “perfect entry point” carries a high cost of delay, leading to smaller wealth accumulation over time.

SIP and market volatility

Kumar says SIPs are designed to help investors overcome timing anxiety. “Think of SIPs as a recurring deposit linked to the market. You’re buying regularly, averaging out costs over ups and downs. One market surge can change your portfolio dramatically,” he says.

He adds that new investors often complain about modest one-year returns of 5–6%, but that misses the point. “You haven’t lost money; you’ve built discipline and accumulated units. When the next bull run comes, those investments will multiply. Staying invested is what counts.”

Build safety nets first

Kumar emphasises that the first step to investing is financial preparedness. “Have an emergency fund covering at least three months of expenses and make sure you have health insurance. Once these are in place, you can invest confidently,” he advises.

He also warns against investing money that may be needed soon. “SIP money should be long-term money — funds you won’t touch for several years,” he says.

Avoid lumpsum investments

While SIPs are suitable for any market condition, Kumar cautions against making large lump-sum investments at once, especially when valuations are elevated. “A lump-sum investment followed by a market correction can be emotionally devastating,” he says.

Instead, investors should spread large sums over time. “If you get ₹1 lakh, invest it over three months. If it’s a few crores from a property sale, spread it over two to three years,” Kumar explains. “Gradual entry ensures you don’t get scared out of the market.”

Choosing the right fund mix

For beginners, Kumar suggests aggressive hybrid or flexi-cap funds with a 5-year horizon. Younger investors with longer time frames can consider small-cap or index funds. “Don’t overcomplicate it. The key is to start. You can always refine your portfolio as you learn,” he says.

Kumar notes that disappointment usually arises when investors chase hot themes or concentrate in a few stocks. “That’s not investing; it’s speculation. Keep your portfolio simple, diversified, and consistent,” he advises.

The final word

Even at market highs, Kumar insists, there’s no better time than now. “If you’re 25 and plan to invest for 35 years, one month’s SIP at market highs is insignificant. The bigger mistake is not starting at all,” he says.

Echoing the WhiteOak report, he concludes, “Markets may be high, but your discipline must be higher. It’s not timing the market that builds wealth — it’s time in the market that does.”