After being on a downswing for nearly six months, stock markets have started to rise again. The overall benchmark indices, Nifty 50 and Sensex, spiked over the last four trading sessions (up to Thursday), with the former rising 6.5 per cent and the latter 6.4 per cent during this period.
Although trade tensions over Trump’s tariffs persist, the pause button pressed by Donald Trump has fuelled a sense of hope in markets worldwide.
The overall bearish sentiment over the past few months has dissuaded investors from putting money into mutual funds. Inflows into mutual funds SIPs have been declining month after month. In January, SIP inflows stood at ₹26,400 crore, dropping to ₹25,999 crore in February and further to ₹25,926 crore in March.
This clearly shows the decline in optimism among retail investors for equity investing. Deepesh Raghaw, a Sebi-registered investment advisor says that equity markets are supposed to be volatile.
“If the current volatility bothers some investors, they should correct your allocation and bring the exposure to equity lower than the current ratio, say 70 percent. And if someone wants to maintain a long term portfolio, they should learn to live with it (volatility),” he said.
“When the markets could come out long periods of lockdown during Pandemic in 2020, we can definitely come out of this volatility,” he added.
| Month (2025) | New SIPs started (lakh) | SIPs discontinued (lakh) |
|---|---|---|
| Jan | 56.19 | 61.33 |
| Feb | 44.56 | 54.7 |
| Mar | 40.19 | 51.55 |
SIP stoppage ratio
In all three months of the calendar year 2025, more SIPs were discontinued than newly registered. In March 2025, 51.55 lakh SIPs were discontinued, while only 40.19 lakh new SIPs were registered, reflecting a SIP stoppage ratio of 128 percent. Significantly, the corresponding ratio in FY 2023–24 stood at 52.4 percent.
About the high SIP stoppage ratio, Raghaw said that investors tend to stop their investment when markets do not do well. “This is human nature. The problem is both behavioural and practical. Practical view is that the markets are forward looking and they have already risen by the time you realise that you should have invested. And the behavioural aspect is that the investors keep waiting for the lower level to invest,” he added.
Amol Joshi, founder of Plan Rupee Financial Services, meanwhile, recommends investors to refrain from stopping their SIPs.
“Long-term investors should welcome volatility. It gives them an opportunity to buy more units at 10-15 percent discount. Lower NAVs (net asset value) lead to higher future gains. Additionally, if you stop SIPs when the markets are down, you are doing great disservice because the market has only given negative return in the past six months. Benefits of equity start to accrue when you stay the course,” Joshi said.
Sridharan S., founder of Wealth Ladder Direct, echoes similar sentiments. “Every correction is an opportunity to buy more. Those who invested only last year have negative returns in their portfolio. However, when you see it from a long term lens, investors should remain invested,” said Sridharan.
Note: This story is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related decision.
