How SIPs Benefit from Market Volatility
SIP & Volatility: Why Market Ups and Downs Might Be Your Best Friend
Volatility feels scary—but for SIP investors, it might just be a blessing in disguise. In fact, the very market swings that make headlines can quietly help your SIPs work harder. Here’s how.
Let’s be honest: market volatility sounds like a bad thing.
You hear it on TV, see it on your app—“Markets crash 500 points!”—and suddenly that SIP you’ve been quietly running for months feels shaky.
You wonder, “Am I throwing good money after bad?”
I get it. I’ve heard this from friends, clients, even neighbours over chai.
But here’s the twist: volatility might actually be helping you, not hurting you—especially if you’re investing through a SIP.
Let’s unpack that.
🌀 What’s Volatility, Really?
Put simply, volatility means price swings. Up, down, repeat.
It doesn’t mean the market is broken. It just means it’s alive.
Think of it like the tide—you don’t panic when the water rises or falls. You respect the movement, maybe time your steps, but you don’t run screaming from the beach.
💡 SIP: A Smart Way to Ride the Tide
Systematic Investment Plans (SIPs) are designed to turn volatility into an advantage through something called rupee cost averaging.
That’s not a fancy term—it just means:
- When markets fall, your SIP buys more units.
- When markets rise, it buys fewer units.
- Over time, you average out the cost per unit—often lower than if you tried to time the market.
“In the short term, markets test your patience. In the long term, they reward your discipline.”
🤔 But What If the Market Keeps Falling?
Totally fair question. I’ve seen this fear firsthand.
During Covid in 2020, a few SIP investors panicked and stopped their investments. Others held on quietly. A year later, guess who smiled at their portfolio?
It’s not about predicting the fall. It’s about riding through it.
And remember—SIPs don’t work in a straight line. They work like compounding, slowly and then suddenly.
🛑 Mistakes I’ve Seen Investors Make During Volatility
Let me share a few real-life examples (no names, of course):
- Stopping SIPs in a downturn: This cuts off the very benefit of buying more when prices are low.
- Shifting to “safer” options without a plan: Safety feels good temporarily, but inflation quietly eats away your growth.
- Watching NAVs daily: This leads to emotional decisions. Investing isn't about dopamine hits.
Instead, here’s a better approach...
📋 What To Do When Markets Get Bumpy
- Stay the course: If your goal is years away, short-term volatility doesn’t matter.
- Review, don’t react: It’s okay to assess your portfolio—but don’t act just to feel in control.
- Trust the process: SIPs are like planting seeds. You don’t dig them up every time the weather changes.
💬 FAQ: What People Ask Me Offline
Q: Should I pause my SIP if markets are falling?
A: Nope. That’s actually when SIPs shine the most.
Q: Can I increase my SIP during market dips?
A: If you have surplus funds, yes—top-up SIPs or lump-sum add-ons can boost returns.
Q: What if I started at the “wrong time”?
A: There’s no perfect time. SIPs help average things out over months and years.
🙌 Final Thought: Fear Is Loud. Discipline Is Quiet.
Look, I know volatility doesn’t feel good. It’s uncomfortable. But so is the gym, or dieting, or waking up early to walk.
SIPs thrive on discomfort. They quietly reward you for being consistent when others aren’t.
So, if you’re feeling nervous, that’s okay. You’re human.
But if you’re feeling curious about what your SIPs are really doing for you in this market—I’d say, let’s talk. Offline, of course.
Because your future doesn’t need to be volatile—even if the markets are.
Comments
Post a Comment