Market crashes are the BEST time to buy more units
When markets fall, your SIP buys more units at lower prices. This is called
rupee cost averaging — the core advantage of SIP. Investors who continued SIP during
2008 and 2020 crashes earned significantly higher returns than those who stopped.
Keep Your SIP Going Strong
Use our calculator to see long-term growth projections through market cycles.
What Happens When You Continue vs Stop SIP During Crash
Real example: ₹10,000 SIP started Jan 2007, comparing through 2008 crash:
Scenario
Strategy During Crash
Value by Dec 2012
Outcome
Investor A
Continued SIP through crash
₹12.8 Lakh
+78% returns
Investor B
Stopped Oct 2008, restarted Apr 2009
₹10.2 Lakh
+42% returns
Investor C
Stopped & withdrew in panic
₹5.8 Lakh
-19% loss
The investor who continued SIP earned ₹2.6 lakh more than the one who paused for just 6 months. The panic seller lost nearly 20% of their investment permanently.
Historical Market Crashes & Recoveries
2008 Global Financial Crisis
Nifty Peak (Jan 2008)6,357
Nifty Bottom (Oct 2008)2,524 (-60%)
Recovery Time~24 months
Nifty by Jan 20105,232 (recovered)
2020 COVID Crash
Nifty Peak (Jan 2020)12,362
Nifty Bottom (Mar 2020)7,511 (-39%)
Recovery Time~6 months!
Nifty by Nov 202012,968 (new high!)
Key Learning: Markets have always recovered. The 2020 crash recovered in just 6 months! Those who continued SIP during March 2020 got units at massive discounts that multiplied in value.
The Math: Why Continuing SIP Works
Example: ₹10,000 SIP, NAV falls from ₹100 to ₹60
Month
NAV
SIP Amount
Units Bought
Cumulative Units
Month 1 (Normal)
₹100
₹10,000
100
100
Month 2 (Crash starts)
₹80
₹10,000
125
225
Month 3 (Bottom)
₹60
₹10,000
167
392
Month 4 (Recovery)
₹75
₹10,000
133
525
Month 5 (Recovery)
₹90
₹10,000
111
636
Month 6 (Normal)
₹100
₹10,000
100
736
Result: ₹60,000 invested → 736 units → Value at ₹100 NAV = ₹73,600 (22.6% gain!)
If you had stopped during crash (months 2-4) and only invested ₹30,000, you'd have just 311 units = ₹31,100
What Should You Do During a Crash?
Action
Recommendation
Why
Continue SIP
MUST DO
Buy more units at lower prices
Increase SIP
Highly Recommended
Accelerate wealth creation at discounts
Check portfolio daily
AVOID
Increases anxiety, no benefit
Stop SIP
NEVER
Miss best buying opportunities
Redeem in panic
WORST MISTAKE
Locks in losses permanently
Pro Tip: Set up auto-debit for SIP. This removes the emotional decision-making during volatile times. Your SIP runs on autopilot, buying more units when markets fall.
Frequently Asked Questions
Should I continue SIP during market crash?
YES, absolutely continue! Market crashes mean lower NAVs, so your SIP buys MORE units. When markets recover (and they always have), those extra units multiply your gains. Historical data shows investors who continued SIP during 2008, 2020 crashes earned significantly more than those who stopped.
Should I increase SIP during market crash?
If you have surplus funds, YES! This is called 'opportunistic investing'. Increasing SIP by even 20-50% during crashes accelerates wealth creation. Think of it as a sale - you're getting mutual fund units at discount prices.
What happens if I stop SIP during market crash?
You miss buying units at lower prices (the best time to accumulate). When markets recover, you'll have fewer units participating in the upside. Historical analysis shows stopping SIP during crashes can reduce long-term returns by 15-30%.
How long do market crashes typically last?
Major crashes: 2008 lasted ~13 months to bottom, 2020 COVID crash lasted just 2 months. Recovery typically takes 1-2 years. Your SIP horizon is typically 10-20+ years - crashes are just temporary blips in your wealth journey.
What if I need the money during a crash?
This is why emergency funds matter! Keep 6-12 months expenses in liquid funds/FD separately. Your SIP money should have a 5+ year horizon. Never invest money you might need soon in equity.