More SIPs were stopped than started in India for the first time in 11 months, reflecting increased investor caution amid market volatility
Investors seem to be feeling the pressure of market ups and downs. For the first time in nearly a year, more Systematic Investment Plans (SIPs) were stopped than started in India. Around 53.38 lakh SIPs were either discontinued or reached maturity last month, while 52.82 lakh new SIPs were opened.
Market volatility makes investors nervous
While ups and downs in the market are normal, recent fluctuations have made many investors uneasy. Returns from one-year and even two-year SIPs have turned negative in several funds, which has added to the disappointment.
According to experts, this reaction is often driven more by emotion than by long-term financial logic.
Why SIPs are designed for uncertain markets
SIPs are meant to perform best during uncertain or falling markets. The main principle behind them is rupee cost averaging.
When markets fall, the same monthly investment buys more units. When markets rise, it buys fewer units. Over time, this helps balance out the cost of investment.
Experts say stopping an SIP during a downturn is similar to leaving just when the strategy begins to work.
Simple example of how SIPs work
To understand this better, consider a basic example. When the market is high, an SIP purchase gives fewer units. When the market drops, the same amount buys more units at a lower price.
According to experts, when markets eventually recover, those extra units gained during the downturn increase in value, helping improve long-term returns.
This is why continuing investments during weak markets can be beneficial in the long run.
Flexible ways to invest through SIPs
For investors who feel uncertain, there are more flexible approaches to SIP investing.
Experts suggest weekly SIPs instead of monthly ones. This spreads investments across more entry points, which can help smooth out costs further.
Another option is a Systematic Transfer Plan (STP). In this method, a lump sum is first placed in a relatively safer fund and then gradually moved into equity markets. This allows investors to benefit from market dips without investing everything at once.
The mistake of exiting too early
One of the most common mistakes investors make is stopping SIPs too soon. SIPs are not designed for short-term gains. They require time to move through different market phases.
Experts note that SIPs typically need at least 12 to 18 months to go through a full market cycle and show their true benefit.
Exiting during a downturn often means missing the recovery phase, which is where long-term gains are usually generated.
What the latest SIP data indicates
The fact that SIP stoppages have crossed new registrations highlights a pattern often seen in retail investing. Investors tend to withdraw when markets fall, even though this is usually the phase when staying invested matters most.
(Disclaimer: The information provided in this article is for general informational and educational purposes only. It does not constitute financial, investment, or professional advice. Readers are advised to conduct their own research or consult a qualified financial advisor before making any investment decisions. Market investments are subject to risks, including the potential loss of capital, and past performance does not guarantee future results)
Published: 28 Apr 2026, 11:37 am IST
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