By Nick Investment · Updated 2026-10-28
Falls are part of owning equity. What your SIP is doing during one, the mistakes that cost the most, and the few good reasons to actually change your plan.
If you invest in equity, you will see falls. Drops of 10% happen often. Larger ones of 20% or more come every few years. In 2008, and again in early 2020, Indian indices fell by a third or more within months.
Markets recovered from those falls, but the time it took was different each time, and there is no rule that says the next fall will recover on a similar schedule. What history does show is that people who sold in a panic often missed the recovery.
It is useful to accept this before a fall happens. If a 30% drop would make you sell, your plan has too much equity for you.
A 30% fall on a ₹10 lakh portfolio shows up as ₹3 lakh gone. For a SIP investor, much of that is a fall in price on units you still own. You hold the same share of the same companies through the fund. The loss becomes final only if you sell.
That doesn't make falls painless, and some funds do lose money for good, especially narrow or low-quality ones. But for a diversified fund held for a goal that is still years away, the question that matters is the time left, not the day's number.
A SIP invests the same amount each month. When the NAV is lower, that amount buys more units. Those cheaper units are what lift the portfolio when prices later recover.
So a fall in the early or middle years of a long SIP is not all bad news. The value on your statement is lower, but you are buying more of the fund for the same money. This is the main reason to keep the SIP running through a fall.
Near the end of a goal it is different. A fall a year before you need the money can't be waited out. That is why the plan should move money out of equity gradually as the goal comes close, not in a hurry after a fall.
Not every change is panic. Some reasons to act are sound, fall or no fall.
Say your plan is 60% equity and 40% debt. After a sharp fall, equity may be down to 50% of the portfolio. Rebalancing means moving some money from debt back into equity to restore 60%. After a strong rise, you do the opposite.
This feels wrong in the moment, because you add to what has just fallen. That is the point. It turns 'buy low, sell high' into a rule you follow rather than a guess. Doing it once a year, or when the mix drifts by more than a set amount, is enough for most families.
Rebalancing can have tax and exit-load costs, so it is done with care, often by directing new SIP money rather than by selling.
The best time to decide how you will react to a fall is when markets are calm. Write down your equity share and your goals with their dates. Keep the emergency fund full. Move money for any goal due in the next two or three years out of equity. Then, when the next fall comes, you are following a plan instead of making one.
During a fall, many people simply want to talk it through. Call or WhatsApp us, or walk in. We look at your goals and time frames, not the day's index, and tell you plainly if something in your plan needs to change. Most of the time, the answer is to keep going.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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Nick Investment is an AMFI-registered Mutual Fund Distributor (ARN-112296). We are not a SEBI Registered Investment Adviser. We distribute regular plans and receive trail commission from the asset management companies, which is included in the scheme's expense ratio.