Many investors feel tempted to pause their systematic investment plans (SIPs) when markets hit all-time highs. The fear of buying at the peak and losing money often drives this impulse. But investment experts warn that this urge could derail long-term goals.Swati Saxena, Founder and CEO of 4Thoughts Finance, says investors should look at SIPs and dip-buying as parts of the same plan, not as either-or strategies.“Investors have lump sum savings which can predominantly be invested at dips for the long term, and the monthly savings should be routed through SIPs,” she explains.
But Saxena points out that chasing market dips is easier said than done.“It is not feasible to predict dips, hence lump sum investment can be done via a combination of SIPs and lump sum. Integrating dip-buying with SIP investing provides a more balanced, disciplined, and effective long-term strategy,” she says.In recent months, more investors have hit the pause button on their SIPs, hoping to re-enter when the market corrects.According to AMFI data, over 1.12 crore SIPs have been closed so far this year.Harsh Gahlaut, Co-Founder and CEO of FinEdge, cautions that this approach could backfire. “Stopping your SIP when the markets are at a high might feel right, but it is a mistake that can cost you in the long run,” he says.
He explains that SIPs work precisely because they take emotions and guesswork out of investing. “India’s markets have seen multiple highs in the past decade. Each time, markets eventually moved higher,” he says.Ishkaran Chhabra, Founding Partner and Chief Investment Counsellor at Centricity WealthTech, calls halting SIPs during market highs “counterintuitive.”He says, “Past evidence has shown that staying invested through downturns creates more wealth than trying to time exits.”Saxena agrees that consistency is the secret to making SIPs work.“Monthly savings done by SIPs are meant to deploy surplus money in bank accounts into the market, and that enjoys the power of compounding if done continuously for the long run,” she says. She adds that trying to time the market rarely pays off. “It is important to follow a more disciplined and focused approach in SIPs,” she advises.How to balance the urge to buy the dip with the discipline of SIPsSaxena says lump sum investments can be staggered. “Integrating dip-buying with SIP investing provides a more balanced, disciplined, and effective long-term strategy,” she says.She also highlights some common mistakes investors make. Investors should review their selected ETFs at selected time periods and focus on following this regularly. Panic-driven changes can harm returns.“While staying informed is essential, investors should avoid making frequent changes to their SIP portfolio. They should rely on their advisor who can manage this dispassionately and professionally,” Saxena says.
