Market update
Should You Stop Your SIP When Markets Fall? What 26 Years of Data Say
26 years of NSE and BSE data on market falls, recoveries and what happened to investors who kept their SIPs going
Short answer: keep your SIP going. In 22 of the last 26 years the Nifty 50 fell 10% or more at some point in the year, yet 21 of those years ended positive. Investors whose SIPs were in loss or near zero during the 2009, 2011 and 2020 crises, and who continued, have earned roughly 11% to 17% a year since.
1. What you are seeing in your portfolio today
As on 30 September 2026, a large cap SIP is negative for every period up to one year and flat even after three years.
Source: NSE. SIP of ₹10,000 on the 1st of every month in Nifty 100 TRI, Nifty Midcap 150 TRI and Nifty Smallcap 250 TRI, as on 30 Sep 2026. Returns under 1 year are absolute; 1 year and above are XIRR. Index returns exclude scheme expenses.
If your SIP looks like this, you are not alone.
2. It is natural to feel worried
The headlines carry wars, geopolitical tension and FII selling every day. Friends and relatives say "I told you the market is risky." So questions come up:
- Did I start my SIP at the wrong time?
- Should I stop now and restart when things settle?
- Will it fall further? Am I putting good money after bad?
- Would my money have been safer in an FD?
These are fair questions. Let us answer them with data, not emotion.
3. Every year has a fall inside it, yet most years end positive
A fall inside almost every year
Nifty 50 TRI, calendar years 2000 to 30 Aug 2026
22 of 26
years had a fall of 10% or more at some point
21 of 26
years still ended positive
2008
Fell 59% within the year
2009
Rose 78%
2020
Fell 38%, ended the year up 16%
2026 so far
Maximum fall 15% (till 30 Aug)
In 2008 the Nifty fell as much as 59% within the year, and in 2009 it rose 78%. In 2020 it fell 38% during Covid, yet still ended the year up 16%. The maximum fall in 2026 so far (till 30 August) is 15%, which is ordinary by historical standards.
4. Nine falls of more than 20%, each followed by a recovery
The deepest fall was in 2008–09 (-60.91%), and it took 605 days to recover. The Covid fall of 38% was made up in just 231 days. Despite all these falls, the Sensex has delivered a long-term CAGR of 15.01% as on 31 March 2026.
Source: BSE India, Sensex data as on 31 Mar 2026. Past performance is not a guarantee of future returns.
5. SIP returns have been negative before, and far worse than today
Today a 1-year large cap SIP is at -10.81%. On 23 March 2020, during Covid, the same SIP was at -58.52%.
Source: NSE. SIP of ₹10,000 a month in the respective TRI; returns are XIRR. Mid and small cap index data starts April 2005.
6. What happened to those who stayed
These SIPs had run about 5 years and were in loss or near zero on the crisis date. Continued till 30 September 2026, they earned 11% to 17% a year (XIRR). For example, a mid cap SIP continued through the December 2011 crisis turned ₹23.7 lakh invested into ₹1.59 crore.
Source: NSE. SIP of ₹10,000 a month in Nifty 100 TRI, Nifty Midcap 150 TRI and Nifty Smallcap 250 TRI, continued till 30 Sep 2026. Index returns exclude scheme expenses.
On that day, the only difference was who stayed.
7. What if you had invested a lumpsum at the peak?
The worst timing was 1 January 2008: ₹1 lakh fell to ₹37,087 at the bottom (-62.9%) and took 34.1 months to break even. That same ₹1 lakh is worth ₹5.06 lakh today.
Source: NSE, Nifty 500 TRI. ₹1 lakh invested at the start of each fall; CAGR is from the peak date. Index returns exclude scheme expenses.
A lumpsum recovers too, but it needs more patience; in the 2008 case it was still negative five years later. That is why the SIP should not stop: time rescues the investment, not timing.
8. The cost of waiting for the "right" time
The cost of missing the best days
₹10 lakh in Nifty 50 TRI, Jan 2000 to Sep 2026
1.44% a year over nearly 27 years.
An investor who missed the 50 best days in nearly 27 years turned ₹10 lakh into just ₹15 lakh, or 1.44% a year. Anyone who exits and tries to re-enter later runs the risk of missing exactly such days.
9. 25 years of evidence
Average experience of 48 diversified equity schemes that existed on 31 March 2001, as on 31 March 2026:
- Lumpsum: ₹1 lakh grew to ₹54.57 lakh, a 17.35% CAGR, from one investment left untouched.
- SIP: ₹10,000 a month, ₹30 lakh in total over 300 months, grew to ₹3.02 crore, a 15.56% XIRR.
Source: ACE MF, returns as on 31 Mar 2026, SIP on the 10th of each month. Note: this averages only schemes that survived from 2001 to today; schemes that closed or merged are not counted.
10. Three reasons to continue your SIP in a falling market
- Lower NAV, more units: the same instalment buys more units when prices are low. Rupee-cost averaging does its best work in a falling market.
- Compounding needs continuity: units bought at low NAVs add the most wealth when markets recover. An instalment skipped today cannot be bought back at today's price.
- Selling makes the loss real: today's loss is only on paper. Redeeming makes it permanent, and a redeemed unit cannot take part in the recovery.
Rupee-cost averaging does not assure a profit or protect against loss in declining markets.
11. Your questions, answered
Did I start my SIP at the wrong time? There is no single right time for a SIP. When markets fall, the same instalment buys more units.
Should I stop now and restart later? That needs two right calls: when to stop and when to restart. Stopping now means skipping the instalments that buy the most units.
Will the market fall further? Nobody can say for sure. History shows that every major fall so far was followed by a recovery and rewarded those who continued. There is no guarantee the future will repeat this.
Would an FD have been safer? An FD suits money you need soon. Your SIP is for a need that is years away, where today's fall matters far less than the time ahead.
My portfolio is in the red. Compare it with your goal, not with last month. Your goal is years away, and a good plan already allows for phases like this.
12. Need money urgently?
- Emergency fund: the first place to turn. It is kept aside for exactly this situation.
- Loan against securities: meets the cash need while your units stay invested and take part in the recovery. Interest and terms apply.
- Talk to your distributor before redeeming: together you can find the option that does the least damage to your long-term plan.
The emergency is temporary; a redemption at the bottom is permanent.
13. What to do now: four steps
- Continue your SIP. Keep every instalment going; this is when your SIP buys the most units.
- Top up if you can. If cash flow and your risk profile allow, increase the SIP or add a lumpsum.
- Review once a year. Measure the portfolio against your goals, not against the market every day.
- Call before you act. When headlines worry you, talk to us before you stop or redeem anything.
“The stock market is a device for transferring money from the impatient to the patient.” — attributed to Warren Buffett
The question is not "How is the market doing?" but "Are we on track for your goal?" For a review of your own portfolio, contact us at thecapitalinvestment.in.
Data sources (references)
- NSE / NSE Indices: Nifty 50 TRI, Nifty 100 TRI, Nifty Midcap 150 TRI, Nifty Smallcap 250 TRI, Nifty 500 TRI (niftyindices.com)
- BSE India: Sensex falls, recoveries and long-term CAGR as on 31 Mar 2026 (bseindia.com)
- ACE MF: Nifty 50 TRI daily values and 25-year data for 48 equity schemes
- Compiled by: NJ India Invest Pvt. Ltd. (ARN-0155), investor presentation "Staying Invested Through Volatile Markets" (njwealth.in); charts redrawn from that data
Frequently asked questions
Should I stop my SIP when the market falls?
For a long-term goal, continuing is usually better. In a falling market the same instalment buys more units. Past performance does not guarantee future returns.
Have SIP returns been negative before?
Yes. On 23 March 2020 a 1-year large cap SIP was at -58.52%, and 3-year SIPs were negative in 2009 and 2011 as well.
What should I do if I need money urgently?
Use your emergency fund first, then consider a loan against securities, and speak to your distributor before redeeming.
Did I start my SIP at the wrong time?
There is no single right time for a SIP. When markets fall, the same instalment buys more units.
Would an FD have been safer?
An FD suits money you need soon. Your SIP is for a need that is years away, where today's fall matters far less than the time ahead.
Want a review of your own portfolio?
We compare your SIPs with your goals and go through the numbers with you. The Capital Investment, Pal–Adajan, Surat.
Mutual fund investments are subject to market risks; read all scheme-related documents carefully. Past performance may or may not be sustained in future. Index returns exclude scheme expenses. This article is for information only and is not investment advice. The Capital Investment, AMFI-registered Mutual Fund Distributor, ARN-129145.
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