What If You Kept SIPing Through the 2008 & COVID Crashes?

When your portfolio turns red, stopping the SIP feels like protecting yourself. But a SIP is designed to do its best work precisely when prices fall — stopping it throws away that advantage at the worst possible moment.

Historically, investors who kept their SIP running through a crash bought units cheaply and recovered faster; those who stopped near the bottom locked in losses and missed the rebound. You can prove this to yourself by replaying it on real history.

Replay a SIP that ran straight through 2008–09 in the Lab. Through the fall, each instalment buys more units at lower NAVs; when the market recovers, those cheaply-bought units drive an outsized rebound. An investor who paused during the panic would have sat out exactly that discount.

The COVID crash was violent but fast. A SIP that kept running through March–April 2020 scooped up units at multi-year-low NAVs, and the sharp recovery that followed turned that discipline into meaningful gains — again, visible when you replay it with the Time Machine.

Stopping a SIP in a downturn cancels rupee-cost averaging at the exact moment it is most valuable. You stop buying when units are cheapest and typically restart only after prices — and your average cost — have climbed again.

This is loss aversion at work: the pain of a paper loss feels larger than the joy of an equal gain, pushing us to "do something". A pre-committed plan — and seeing, with real data, how past crashes actually played out — is the best defence against a costly gut call.