Should You Pause Your SIP During A Crisis? Expert Tips For Long-Term Investors

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Picture this. It’s December 31. Shankar had invites to attend at least three parties and was unsure about which ones to attend and in what sequence to do so. At the first party that he went to, the participants were largely from his office and the obvious topic was how much increment they were expecting to see coming their way in the next three months, and what plans they would be going for, using the incoming proceeds. Top of the list, of course, were holiday plans followed by SIP top-ups. 

Now, nobody could have imagined that this’d be the way things would turn out. Not only did Shankar and friends discuss losses, but also share in the continued uncertainty of the times clearly taking its toll. 

So, the questions that arise now are simple: What should Shankar do now? Should he pause his SIPs? Should he stop them altogether? Should he take out the money invested so far? 

Let’s try and answer these logically and sequentially. 

Firstly, Why Were The SIPs Started?

The answer to this is rather straightforward: wealth creation over time. 

If he had started some four years back, he could still have decent money, but much lower than where he was a fortnight or so back. But if he were to check his numbers with a little more diligence, he would see that the maximum returns he made was when the crude oil per barrel costs rose to $100 levels and two countries in Europe went to war. 

It should be noted that these are times when SIPs need to be continued with, because when it comes to investment, the one trusted friend that we have is ‘time’. 

Shankar has already made his decision on wealth creation. And there is no doubt on the fact that the Israel-Iran conflict will go on forever. Creating wealth on a sequential basis is not something that happens overnight, or even in a linear manner. In fact, the math associated with SIP is an absolute truism. It’s not the amount, it is the compounding that matters. 

Secondly, Is This The First Time A Disruption Like This Has Happened?

Perhaps more importantly, where did such disruptions like the West Asia conflict lead to earlier? 

To figure this out, I asked Google to tell me the number of wars that have taken place in this century and it replied: As of early 2026, over 130 armed conflicts are active globally, a figure that has doubled in the last 15 years, with about 60 nations involved in warfare. While major, high-fatality wars are fewer, the 21st century has seen over 100 distinct conflicts, including major engagements in Iraq, Syria, Afghanistan, Yemen, and Ukraine. 

Pertinent to note that this is the highest since the end of World War II in 1945. Nifty 50, at the turn of the century, was 1,480. At the time of writing, it stood at around 23,400. This essentially marks a 15-fold jump in 26 years.

You can look at this in any which way you want, but there’s no room for debate when it comes to accepting the benefits of playing the long game, irrespective of wars or natural disasters. 

The Congo wars, which took place in the late ‘90s and early 2000s, nearly consumed the African continent and a lot of major powers as well. The Iraq War took place in 2003, the Libyan invasion in 2011, and the Russo-Ukrainian war started some four years back and still rages on. 

The moral of the story is simple. There’s no doubt that the ongoing Israel-Iran conflict has the biggest “immediacy impact” than the ones mentioned earlier. However, looking back, would we have seen these times as threats or opportunities?

Thirdly, Do You Need This Money Now?

Do you have the luxury of waiting it out? If you need the money in the next three months and are looking to check out, that’s the best approach. Go ahead and do so. But if you have the wherewithal to sustain yourself over the next year, then there is nothing to worry about. 

And if you have a longer horizon, then nothing could be more defeating than liquidating. I know of well-placed people who are still holding cash from COVID times. And it seems they will continue to do so.

Timing is the worst bet one could make as it is, at best, a 50:50 chance. Time, on the other hand, is the one sure-shot 100 per cent bet. 

Ensuring liquidity and income flow is what one must do, rather than be driven by television and social media feedback, for investment decisions.

Lastly, Do You Need To Book Profits Or Losses?

If you are a high net-worth individual (HNI) and are making a tactical orientation to balance the books, it is a different story altogether. That does not have a bearing on whether one should stop the SIP. 

But if you, like most of us, are investing to build a large corpus and do not want to watch your portfolio lose value every day, stay away from that thought completely.

Investment values go up and go down. Actually, more down than up. But the net result is a positive one. 

It is surely worth checking out if this is the point where some schemes are doing worse than others? Is your portfolio lopsided in one segment? Sure, check that out as well. Recalibration should be a regular exercise, and not an event driven one. 

Make sure that this is done once every six months to be sure. But ‘quit’ or ‘add’ decisions are not based on markets, but on needs. So, if you have one, quit. If not, stay. 

Chasing returns is a waste. Allocation is the ONLY commandment to heed. Stay the course and this too shall pass.

(The author is the Founder & CEO, Plexus Management Services)

Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP Network Pvt. Ltd.