Nifty has fallen for 8 straight weeks: How should SIP investors rethink their strategy? Experts explain

The Nifty 50 has fallen for eight consecutive weeks, putting investors who systematically invest in equities through SIPs in a familiar but uncomfortable situation. As markets remain weak, the temptation may be to pause SIPs, increase investments to take advantage of lower prices or change the funds in the portfolio.

But a prolonged market correction does not, by itself, require investors to change their SIP strategy. For investors whose financial circumstances and goals remain unchanged, continuing the existing SIP may be more appropriate than reacting to market movements.

“The first response would be: don’t change your SIP just because the market is going through a difficult phase,” said Sanjiv Bajaj, Joint Chairman and MD, Bajaj Capital. A SIP is designed to work across market cycles, he said, including periods when markets are falling.

Should you stop your SIP when markets fall?

One advantage of continuing a SIP during a correction is that the same investment amount can buy more units when prices are lower. This is part of rupee-cost averaging, Bajaj said.

Stopping a SIP, however, creates another problem of deciding when to restart it. Markets can recover before investor sentiment turns positive. By the time an investor feels comfortable investing again, part of the recovery may already have taken place.

This does not mean investors should continue SIPs regardless of their circumstances. Someone facing a job loss, an unexpected expense or a need to preserve cash may reasonably prioritise liquidity.

“But if the only reason for pausing is that the headlines are making you uncomfortable, I would say stay with your plan,” Bajaj said.

For investors whose cash flows and financial goals remain intact, the current correction therefore need not automatically trigger a change in their SIPs.