Paused Your SIP In A Downturn? You Just Disrupted A System Built For Chaos

Every time markets wobble, WhatsApp groups light up with worry. "Should I pause my SIPs?" one investor asked after Trump's latest tariff threats sent the Sensex sliding. "Maybe wait and watch?" suggested another. The pattern is as predictable as it is self-defeating: the moment volatility sets in, systematic investment plans (SIPs) start to feel optional.

- DHIRENDRA KUMAR

This week's jitters over US trade policy offer a case in point. Trump's move to impose a 50% tariff on Indian goods has triggered the kind of uncertainty that makes investors want to hit pause. With the Sensex down by over 4,000 points from recent highs, many feel exposed to further declines. But this impulse to pause SIPs during market swings reflects a basic misunderstanding of how they're meant to work.

Spreading purchases: Systematic investing is built on the idea that markets are unpredictable. By spreading investments over time, SIPs help smooth out volatility. Pausing them during downturns doesn't protect you—it undercuts the very approach meant to turn volatility into an advantage.

The instinct to pause is understandable but misplaced. Seeing a portfolio dip is uncomfortable, and taking action—any action—feels better than doing nothing. But hitting pause often means trading a sound long-term plan for short-term emotional relief.