Why Long-Term SIPs Work—Even When the Market Crashes

Long-Term SIPs Work

You know that sinking feeling when the market suddenly crashes by 10–12%? Your heart races, your WhatsApp is flooded with “market crash” messages, and your first instinct is to stop your SIPs—because hey, if everything is falling, why keep investing, right?

Wrong.

I’m here to tell you exactly why this knee-jerk reaction might be the worst thing you can do for your financial future. If you just hold on, and I mean hold on through all the dips, crashes, and corrections, SIPs can take you from ₹10,000 a month to ₹9 crore. And I’m not throwing this number in the air; I’m talking real data, real timelines, and real people who stuck it out.

Let’s start with a simple truth…

SIPs are Not for the Impatient

SIPs are like growing a tree. You can’t plant the seed today and expect a full-grown mango tree tomorrow. You water it, protect it, give it sunlight, and yes, even when storms come, you don’t yank it out of the ground. You wait.

And then, it rewards you.

Meet Mr. A—And Learn from His Patience

Let’s take the story of an investor, let’s call him Mr. A. He started a ₹10,000 monthly SIP in Nippon India Growth Fund back on 1st January 2000. Two years later, on 2nd January 2002, he’d invested ₹2.5 lakh, and guess what? The market value of his investment was just ₹2.08 lakh.

If you were in his shoes, what would you do?

Let me guess. Panic. Curse the financial expert who recommended SIPs. Pull the money out. And swear off mutual funds forever.

But what if Mr. A did none of that?

Patience Pays—And How!

Now imagine Mr. A watched a video like this and thought, “You know what, SIPs are meant for the long term. Let’s just stay invested.”

Fast forward to December 2005, and he had invested ₹7.2 lakh, and the market value of his portfolio had shot up to ₹35.64 lakh.

Let that sink in.

From “my money is eroding” to “my investment has multiplied 5x”—all because he stayed in.

But wait, the story’s not over.

The 2008 Crash: A Test of Nerves

By January 2008, Mr. A had invested ₹9.7 lakh and was sitting on a portfolio worth ₹1 crore.

But then came the 2008 global financial crisis. His portfolio nosedived to just ₹42 lakh.

Most people would’ve said, “ Enough is enough.”

But Mr. A? He remembered the golden rule of don’t withdraw unless you need the money.

And guess what, by May 2010, his portfolio was back at ₹1 crore.

Then Came COVID—And a Bigger Test

Let’s now jump to February 2020. Right before COVID, Mr. A’s portfolio was worth ₹2.43 crore. Then the pandemic hit. In just a month, his investment crashed to ₹1.94 crore.

In 30 days, he saw nearly ₹90 lakh vanish from his screen.

Did he panic? No.

By December that same year, his portfolio had rebounded to ₹3.17 crore.

And as of 4th November 2024, guess how much that same ₹10,000 monthly SIP has grown to?

A jaw-dropping ₹9.7 crore.

That’s the power of consistency. That’s the reward for not giving in to fear.

What If He Had Exited?

Think of this: at every point—2002, 2008, 2020—if Mr. A had exited the market, he would’ve locked in a loss or missed out on a massive rebound.

Markets are unpredictable. They crash. They rise. But your discipline? That’s what truly compounds.

Which brings me to my favourite line: the best time to start an SIP was yesterday. The second best is right now. But the right time to withdraw?

Only when you actually need the money.

So How Long Should You Stay Invested?

Each fund category has its ideal investment horizon, based on historical performance and volatility. Here’s a quick breakdown:

• Large Cap Funds: 7 years minimum. Average returns ~12%.
  
• Mid Cap Funds: 8 years. Average returns ~14%.
  
• Small Cap Funds: 10 years. Average returns ~16%.
  
• Flexi Cap Funds: 7 years. Average ~14%.
  
• Thematic Funds: 9 years. Average ~15%.
  

Now remember, “ideal investment horizon” doesn’t mean you must withdraw after 7 years. It means your investment needs at least that much time to give you the best possible chance at good returns.

If you’ve invested in a Large Cap fund, wait at least 7 years. Only pull out if you need the money. Otherwise? Let it grow.

The Real Secret of Wealth Creation

Want to know what separates rich investors from average ones?

It’s not better funds, higher salaries, or secret strategies.

It’s patience.

They stay invested when others run away. They keep investing even when the world screams recession. They ignore the noise and trust the process.

That’s it. No rocket science. Just discipline.

Ready to Begin?

If this blog made you rethink your SIP strategy and you’re wondering where to begin, that’s where we come in.

Drop your details in the comments (or message us directly), and we’ll help you pick a scheme that matches your life, your goals, and your time horizon.

But whatever you do, don’t stop your SIP because the market dropped 10%. If you didn’t stop when it dropped 40%, you earned crores. Why panic now?

Let your money breathe. Let time do its job.

Also, Check – SIP Taxation Explained

Final Thoughts

Long-term SIPs are not just an investment strategy. They’re a mindset. The market will go up and down, but if you stay invested, you stay ahead.

Think long. Stay calm. Invest smart.

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Disclaimer: This article is for educational purposes only and does not intend to substitute expert guidance. Mutual fund investments are subject to market risks. Please read the scheme-related document carefully before investing.