Market Crash: Time To Stop SIP or Start A New One?

Stock markets fell sharply on Monday, and whenever prices start dropping, it often shakes investor confidence. Many investors are now asking whether they should stop or cancel their Systematic Investment Plans (SIPs).

With the recent market decline, this question has come up again — and financial experts have shared their views.

Falling Markets Offer Better Value

Jatin Gedia believes that investors should stay the course, especially if they have faith in the companies they've chosen.

"In the last five months, there were closures of SIP that we witnessed. However, I think even if someone wants to continue, then you are getting your stocks which you like at a much lower price than they were a month earlier," he said, highlighting how current prices may offer long-term value.

Gedia further adds that if investors still believe in the fundamental strength of the companies they’ve already invested in, then stopping SIPs makes little sense.

"So, I think if you are fundamentally holding on to some of the stocks which you like and you see a decent outlook from a 3-6 month kind of a perspective, then yes, one should continue its SIP in the main mutual fund."

Long-Term Benefits 

Sudeep Shah of SBI Securities reinforced this view with a detailed explanation of how SIPs benefit during bear markets.

"Absolutely. There's no case in discontinuing SIPs because if you continue your SIPs in the rising market, expecting a further gain, in falling markets, you'll get more units. So you'll get a better average price," he explained.

This concept, known as rupee cost averaging, is central to the SIP strategy. Shah pointed out that these lower-priced units eventually lead to better returns when the markets recover.

"Those higher units bought at a lower rate will give you a higher return. And that will show that this is how your compounded return formula, the entire returns matrix works."

He emphasized that historical returns — like the 15% to 20% CAGR often quoted in fund fact sheets — include periods of sharp market decline. Without investing during those lows, those impressive long-term returns wouldn’t exist.

Also Read: Shining Stars: 5 Stocks To Buy In Market Crash

Be Cautious With New Equity Exposure

While continuing SIPs is widely supported, not every expert is in favour of increasing equity exposure at this time. Anand K. Rathi, co-founder of MIRA Money, urged investors to remain cautious amid global uncertainty.

"We are facing an entirely new world order. As investors, we can only make educated guesses with low probabilities. It is extremely challenging to predict how each country will respond to tariffs," he warned.

Although India is expected to maintain healthy growth, Rathi suggests a more balanced approach — continue SIPs but refrain from making lump sum equity investments until the global picture stabilizes.

"Continuing with Systematic Investment Plans (SIPs) is recommended, and any surplus investments should be directed into long-term treasury funds, such as government bonds or corporate bonds with long maturities."

He also advised those who may need access to funds in the near future to shift to safer debt instruments.

Don’t Panic, Stay the Course

Across the board, the message from experts is clear — market crashes are not a reason to stop your SIPs.

On the contrary, they could be an opportunity. As Jatin Gedia puts it, "If you like the company in which you have invested earlier, then you are getting at a better price than earlier. So, I think you should consider continuing with your SIPs."

Short-term volatility is part of investing, but disciplined investing through SIPs allows investors to ride out the storm and benefit when markets recover.

As Sudeep Shah concludes, "These times will pass. It’s just a passing phase now and whatever destructions had to come has already come. So now if you discontinue your SIP, it will not give you any benefit from the current levels."

Stock Market on Monday

Stock markets faced a heavy selloff on Monday, with the benchmark BSE Sensex crashing by 2,226.79 points, or 2.95%, to close at 73,137.90—marking its steepest single-day decline in the last ten months.

The intra-day losses were even sharper, with the Sensex plunging 3,939.68 points or 5.22% to touch a low of 71,425.01.

The NSE Nifty also witnessed a sharp decline, falling 742.85 points or 3.24% to close at 22,161.60, after hitting an intraday low of 21,743.65, down by 5.06%.