Never Stop SIPs in Crashes – 4 Market Crashes & 26 Yrs Data!

Never Stop SIPs!! This article analyzes the impact of stopping SIPs in crashes using 26 years of Nifty 50 TRI data, covering 4 major market crashes.

Many of us in a panic stop the ongoing SIPs with the hope that they enter again when the market will recover. This is one of the worst decisions investors make for their money. It is more of a fear and behavior problem. The same thing is happening when the market started to fall in September 2024.

Never Stop SIPs in Crashes – 4 Market Crashes & 26 Yrs Data!

In this article, I have considered the Nifty 50 TRI data from 1st July 1999 to 27th March 2025 (the maximum availability). This constitutes around 26 years of data and around 6,406 daily data points of Nifty 50.

Here, I have considered four major crashes that happened – the 2000 Dot Com Bubble, the 2008 Financial Crisis, the 2015-16 Yuan Devaluation and Brexit crashes, and the 2020 Covid Market Crash. I considered 1st of every month as the SIP date for my analysis (if 1st date data is not available, then the immediate next date is considered as the SIP date) and the investment amount I have considered is Rs.1,000.

1 – SIP of Rs.1,000 a month from 1st July 1999 to 27th March 2025 (SIP Date 1st of every month or immediate next date)

The total SIPs during this period is 309 months. It means the investor invested in total of Rs.3,09,000. The final value as of 27th March 2025 is Rs.27,50,752.

2 – Dot-Com Bubble – 2000

I considered the SIP stoppage period from 21st Feb 2000 to 28th Feb 2003. It means the investor stopped around 36 SIPs. I have considered these dates mainly from the start of the downfall to full recovery.

Just by missing around Rs.36,000 of the total SIPs amount during those market crashes, the end value was impacted in a big way. The value for this case as of 27th March 2025 is Rs.17,34,874. The difference between who stopped the SIP and who did not do the SIP is a matter of just Rs.36,000 but the final difference as of 25th March 2025 is Rs.10,15,878!! This difference is the cost you paid for stopping the SIP 25 years back.

3 – The Global Financial Crisis -2008

I considered the SIP stoppage period from 8th Jan 2008 to 1st Nov 2010. It means the investor stopped around 34 SIPs. I have considered these dates mainly from the start of the downfall to full recovery.

Just by missing around Rs.34,000 of the total SIPs amount during those market crashes, the end value was impacted in a big way. The value for this case as of 27th March 2025 is Rs.25,25,862. The difference between who stopped the SIP and who did not do the SIP is a matter of just Rs.34,000 but the final difference as of 25th March 2025 is Rs.2,24,890!! This difference is the cost you paid for stopping the SIP 17 years back.

4- Yuan Devaluation and Brexit – 2015-16

I considered the SIP stoppage period from 1st June 2015 to 1st June 2016. It means the investor stopped around 13 SIPs. I have considered these dates mainly from the start of the downfall to full recovery.

Just by missing around Rs.13,000 of the total SIPs amount during those market crashes, the end value was impacted in a big way. The value for this case as of 27th March 2025 is Rs.25,25,862. The difference between who stopped the SIP and who did not do the SIP is a matter of just Rs.13,000 but the final difference as of 25th March 2025 is Rs.34,949!! This difference is the cost you paid for stopping the SIP 10 years back.

5- Covid – 2020

I considered the SIP stoppage period from 14th Jan 2020 to 9th Nov 2020. It means the investor stopped around 10 SIPs. I have considered these dates mainly from the start of the downfall to full recovery.

Just by missing around Rs.10,000 of the total SIPs amount during those market crashes, the end value was impacted in a big way. The value for this case as of 27th March 2025 is Rs.23,793. The difference between who stopped the SIP and who did not do the SIP is a matter of just Rs.10,000 but the final difference as of 25th March 2025 is Rs.34,949!! This difference is the cost you paid for stopping the SIP 5 years back.

All these values can be visualized with the below chart.

I have considered the dates based on the start of fall to recovery. However, if you consider the different dates, then the values may slightly differ but not in a big way. Hence, I don’t think that’s a matter of concern.

But BEWARE…!!

Just because the data reveals that the stoppage of SIPs is bad does not mean that you continue blindly. As this data is meant for equity investment, you must know how to derisk your portfolio as the goal is nearby. The ideal way to derisk is to shift your existing equity to debt and at the same time shift your equity SIP to debt.

However, if the goal is long-term, then in PANIC, don’t stop the SIP. You noticed that for around 26 years of Nifty 50 TRI data, investors faced around 4 market crashes. Hence, being prepared for such market crashes once in a while and doing the proper asset allocation of equity to debt is the mantra than stopping the SIP in panic.

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