Bear markets can feel like a gut punch. Stock prices tumble, headlines scream doom, and your mutual fund portfolio shrinks before your eyes. It’s tempting to hit pause on your Systematic Investment Plans (SIPs)—those regular monthly investments into mutual funds. After all, why pour money into a sinking ship? But hold on. Stopping SIPs during a downturn might be the worst move you make.
What Exactly Happens in a Bear Market?
A bear market is when stock indices like the Nifty 50 or Sensex drop 20% or more from their peak. We’ve seen it before: the 2008 financial crisis, the 2020 COVID crash, and more recently, global inflation jitters in 2022-23. Valuations crash, fear spreads, and even strong companies look cheap—or worthless.
In this chaos, SIPs buy more units when Net Asset Values (NAVs) are low. Think of it like a supermarket sale: you snag more groceries for the same budget. This is rupee cost averaging in action—the magic of SIPs that smooths out market volatility over time.
Why Pausing SIPs Feels Right (But Isn’t)
Emotional investing is human nature. You see your large-cap or flexi-cap fund down 15%, and panic sets in. “Better to wait for the bottom,” you think. Here’s why that’s flawed:
- Markets are unpredictable: No one rings a bell at the exact bottom. If you stop now and the rebound starts tomorrow, you’ve missed the best buying opportunity.
- Opportunity cost: Cash sitting idle earns little (fixed deposits hover at 6-7%). Meanwhile, equity funds historically recover strongly post-bear—Nifty delivered 25%+ CAGR in the three years after 2008.
- Discipline breaks: Restarting SIPs later is hard. Life gets busy, and procrastination kills compounding.
Data backs this: According to AMFI, SIPs running through the 2020 crash averaged 18-22% XIRR by 2025 for equity funds, far outpacing lump-sum timing attempts.
The Power of Staying Invested: Real Numbers
Let’s crunch it with a simple example. Suppose you start a ₹10,000 monthly SIP in a Nifty 50 index fund in January 2020 (pre-COVID peak).
| Scenario | Total Invested (5 Years) | Value as of Jan 2026 (Est. 12% CAGR post-recovery) |
|---|---|---|
| Stopped SIPs in Bear (Mar-Jun 2020) | ₹5,20,000 | ₹7,50,000 (missed low-NAV buys) |
| Continued SIPs Through Bear | ₹6,00,000 | ₹9,20,000 (rupee cost averaging wins) |
Staying put nets you ₹1.7 lakh more. Tools like the SIP calculator on Groww or Zerodha show similar patterns for mid-cap or flexi-cap funds.
When Might Pausing Make Sense? (Rare Cases Only)
SIP discipline is king, but review your situation:
- Short-term goals: If you need money in 1-2 years, shift to debt funds or liquid funds now.
- Emergency fund gap: Build 6-12 months’ expenses in savings first—don’t fund SIPs from borrowed money.
- Overexposure: If equities are 80%+ of your portfolio, rebalance to hybrid funds.
For most long-term investors (5+ years horizon), though, never stop SIPs. Increase them if you can—more units at bargain prices.
Actionable Steps to Ride Out the Bear
- Zoom out: Check your fund’s 10-year chart. Bears are temporary; bull runs last longer.
- Diversify smartly: Mix large-cap (stability), mid/small-cap (growth), and debt (safety).
- Top up SIPs: Use bonuses or windfalls for extra investments.
- Track via apps: Use Dhanomatix or MF Central for real-time NAVs and XIRR.
- Consult an advisor: Get personalized advice compliant with SEBI norms.
The Bottom Line: Keep SIPping Through the Storm
Bear markets test your resolve, but they’re where wealth is built. Stopping SIPs hands victory to fear, not strategy. History shows markets climb walls of worry—Nifty hit all-time highs multiple times post-dips. Stay invested, let compounding work, and emerge stronger.
Ready to review your SIP portfolio? Start today.
Disclaimer: Mutual fund investments are subject to market risks. Read scheme documents carefully. Past performance isn’t indicative of future returns. Consult a financial advisor.