Market corrections trigger the urge to pause SIPs. Experts say the decision rules should be set in calm markets, not during the fall.
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The impulse to pause a systematic investment plan (SIP) hits hardest after markets have already fallen. By then, the decision is often driven by fear. Experts say the time to set rules is now, while markets are calm.
Aditya Mulki, CEO of Navi AMC, says investors should define the situations that genuinely justify a SIP pause before the next correction arrives. The list is short: a loss of income, a major financial commitment, or a meaningful change in long-term goals. Market movements do not make the list.
Manish Srivastava, Executive Director at Anand Rathi Wealth, recommends maintaining an emergency fund separate from the investment portfolio. The goal is to avoid dipping into long-term investments when an unexpected expense hits. Once the financial situation stabilises, investors should resume their SIPs as soon as possible.
Bhalchandra Joshi, Chief Business Officer and Chief Operating Officer at The Wealth Company Mutual Fund, says household financial stability comes first. Continuing investments should not require drawing on emergency savings or taking on expensive debt.
One reason investors stop a SIP is that a fund has underperformed its peers over a short period. Kaustubh Belapurkar, Director of Morningstar Investment Research, says even well-managed funds can go through periods of relative weakness due to market rotation or style headwinds. Unless the investment team or the investment process has changed, he says investors are generally better served by staying the course.
Belapurkar also advises keeping a written record of financial goals, intended asset allocation, and investment horizon. Reviewing those notes during volatile periods can help keep decisions aligned with the original plan rather than with short-term market moves.
Mulki recommends reviewing investments at predetermined intervals, quarterly or annually, rather than checking portfolios every day. A disciplined schedule helps investors focus on long-term progress instead of reacting to daily fluctuations.
Even when a SIP pause becomes unavoidable because of a genuine emergency, experts say investors should decide in advance how they will resume. Joshi says a pause should come with a review date or a clearly defined trigger for restarting. Otherwise, a temporary break can quietly become a permanent one.
Varun Gupta, CEO of Groww Mutual Fund, advises investors to seek objective guidance before making significant changes during volatile markets. Consulting a financial adviser can help ensure decisions stay aligned with long-term goals and risk appetite.
The common thread across all the experts is that investor discipline is built before markets turn volatile. Defining the circumstances that warrant a change, maintaining an emergency fund, and following a disciplined review process are the guardrails that keep long-term plans on track.
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