In times of market uncertainty and falling stock indices, many investors may be tempted to pause or stop their Systematic Investment Plans (SIPs). However, Deepak Agrawal, Chief Investment Officer – Debt at Kotak Asset Management Company (AMC), believes SIPs are more relevant than ever, especially in volatile or declining markets.
Agrawal explains that one of the biggest advantages of SIPs is rupee cost averaging. When markets are down, SIPs automatically purchase more units at lower prices. Over time, this lowers the average cost of investment and positions investors to benefit from significant upside during market recoveries. “Falling markets should not discourage investors but rather be seen as opportunities,” he said.
He emphasized that discipline and consistency are critical when investing in mutual funds. Many investors who stayed invested through previous downturns, including the 2008 crisis or the 2020 pandemic crash, were rewarded with strong returns when markets rebounded. Stopping SIPs during temporary declines often results in missed growth opportunities later.
Agrawal also pointed out that SIPs remove the need to time the market, a strategy that even seasoned investors struggle to execute correctly. Regular investing through SIPs ensures exposure to all market cycles—bull and bear—and helps build long-term wealth.
According to data shared by Kotak AMC, SIP inflows remain robust in India, showing investor confidence in the long-term growth potential of equities and hybrid funds. This trend is encouraging, given global economic uncertainties, interest rate fluctuations, and geopolitical tensions.
For new investors, Agrawal suggests starting small and increasing contributions as confidence and income levels grow. For experienced investors, staying committed during down cycles can lead to substantial gains in the long run.
In conclusion, Deepak Agrawal reinforced the idea that SIPs aren’t just a tool for good times—they’re a core part of a resilient investment strategy, especially during periods of market correction or decline.
