SIPs Across Market Cycles
Lesson 4 of 5 in Mutual Funds & SIP Mastery · 8 min read
A Systematic Investment Plan invests a fixed amount at regular intervals.
Rupee cost averaging
When markets fall, the same SIP amount buys more units; when markets rise, it buys fewer. Over time this can smooth your average purchase cost.
The hardest part: staying invested
Many investors pause SIPs during market falls, exactly when units are cheaper. Discipline matters more than timing.
Step-up SIPs
Increasing your SIP amount each year, for example by 10%, keeps your savings in line with salary growth and can significantly change outcomes.
Reviewing, not reacting
Review your SIPs annually: is the fund still aligned with its mandate and your goal? Avoid switching just because of short-term underperformance.
Mutual fund investments are subject to market risks, read all scheme related documents carefully.
Key takeaways
- SIPs buy more units when prices fall
- Stopping SIPs in a downturn interrupts averaging
- Step-up SIPs keep pace with income growth