SIP portfolios down 20-30% in Indian market crash

The stock market has been very unstable recently, causing many mutual fund investors to see significant declines in their portfolios. Reports show that some Systematic Investment Plan (SIP) investors are facing a drop of 20% to 30%. The Indian stock market had a strong run until September 2024, but since then, things have changed drastically. Major indices like the Nifty 50 and Nifty Midcap 100 have fallen sharply. The Nifty 50 has dropped about 14%, while the Nifty Midcap 100 is down more than 18%. The smallcap index has suffered even more, declining over 22% since its peak in December. Many investors, particularly those in small and medium-sized companies, are feeling the pain of these losses. However, experts suggest that withdrawing money during a downturn may not be the best choice. They generally recommend staying invested and continuing your SIPs. This strategy allows you to benefit from potential recoveries in the market over time. Investing through SIPs helps by averaging out costs. When prices are low, you buy more units, and when prices go up, you buy fewer. This can lower your overall investment cost as the market eventually rebounds. History shows that markets often recover after sharp declines. Before making any changes to your investments, consider your long-term goals and your risk tolerance. It may also be helpful to consult with a financial advisor for guidance. While NFOs can be more unpredictable, holding onto them might be wise if they align with your financial objectives. Selling during a market crash usually locks in losses, which could hinder your financial goals. Instead, focus on long-term growth by staying invested and making regular contributions.