Should I Stop My SIP? What 3 Past Market Slumps Say About 2 Flat Years

Should I stop my SIP? This is the questions probably coming in your mind these days ?😅

If you started investing between July and September 2024, you have probably asked yourself this more than once. Two years later, many portfolios are flat or in the red. The Nifty 50 Total Return Index returned -5.30% a year between September 30, 2024 and September 30, 2026, according to data in WhiteOak Capital Mutual Fund's October 2026 investor note. A monthly SIP in the Nifty 50 TRI started in October 2023 now shows an XIRR of about -1.4%.

Meanwhile, the fixed deposit your relative recommended paid its interest every quarter without drama.

So the question feels fair: did I invest at the wrong time, and would an FD have been better?

It is a fair question. It is also not a new one. Indian investors asked exactly the same thing in 2008, in 2011 and again in 2019. In this article, we look at what happened to the people who kept investing through those stretches, what happened to the people who stopped, and what the evidence suggests you do now.

Why Are SIP Returns Negative Right Now?

SIP returns are negative because Indian equities have fallen sharply in 2026 after a largely sideways 2025. The Nifty is down about 14% this year, on track for its weakest year in 15 years. Anyone who started near the September 2024 peak bought most of their units at prices higher than today's.

The numbers behind the mood are real. With losses of about 14% so far in 2026, the Nifty is heading for its worst calendar year since 2011. It also fell for eight straight weeks, something that last happened in 2001.

The triggers were mostly global. Foreign investors sold heavily, crude oil rose, and the US 10-year Treasury yield crossed 5% in September for the first time since 2007. When safe US bonds pay that much, global money tends to pull back from emerging markets like India.

There was also a cruel twist in the middle. The Nifty briefly made a fresh record of about 26,329 on January 2, 2026 before the slide began. So some investors who added money in the new-year optimism bought at the top a second time.

That is why this phase feels worse than a normal dip. It is not one bad month. It is two years of waiting. WhiteOak's data shows that 46% of trading days in 2026 had negative two-year rolling returns, the highest share in over a decade. For context on where we think markets go from here, read our FY27 equity outlook.

India Has Been Here Before: Three Flat Stretches and What Followed

Long, frustrating stretches after a strong rally are not unusual in India. They have shown up at least three times in the last two decades. Here is how each one played out, using index data from the WhiteOak note (source: MFI360 Explorer).

Read the last column carefully. Each SIP period starts before or near the worst of the fall. These are investors who began at a bad time, kept investing through the pain, and still finished the cycle with a healthy return.

The recoveries also came at very different speeds. After 2008, the Nifty 50 needed 1,032 days to return to its old peak, while the COVID fall recovered in just 300 days. Nobody knew in advance which kind of recovery they were in. That is the honest lesson: the painful part always comes first, and there is no bell that rings at the bottom.

Why Do SIP Investors Recover Faster Than Lumpsum Investors?

A SIP buys more units when prices fall. Those cheaper units mean the market does not need to climb back to its old peak for a SIP investor to break even. In 2008, a SIP started at the top broke even in about 18 months, while a lumpsum invested at the top stayed underwater for years.

Here is a simple, hypothetical example. Say you invest ₹10,000 a month for five months while the NAV falls and then only returns to where it started.

The NAV ended exactly where it began. A ₹50,000 lumpsum made on day one is worth ₹50,000: zero gain. But the SIP's 616.7 units are worth about ₹61,700 at a NAV of 100, a gain of roughly 23%. The units bought in month three did most of the work. (This is an illustration, not a projection of any fund's returns.)

That is exactly what happened in 2008, at a much larger scale. According to WhiteOak's data, a SIP started in January 2008 broke even in about 18 months and was sitting on an XIRR close to 15% shortly after. The lumpsum investor had a much harder road. The Nifty touched its old high within about three years, but did not stay above its January 2008 peak until late 2013.

Two practical points follow. First, if your SIP is running, the fall is doing something useful for you right now: it is lowering your average cost. Our analysis of a decade of SIP data shows the same pattern. Second, if you have a large sum to invest, staggering it through a Systematic Transfer Plan (STP) spreads out your entry risk. We explain how in our guide to lumpsum vs STP.

Should I Stop My SIP and Move My Money to a Fixed Deposit?

Measured from a market peak, an FD will often look better for a while, sometimes a long while. But the comparison only matters at the point you actually need the money. Since 1999, the Nifty 50 has never delivered a negative return over any seven-year period, while a two-year FD paying 6.40% leaves roughly 4.4% after tax in the highest slab.

Start with the FD side. SBI's two-year FD rate is 6.40%. FD interest is taxed at your income slab rate. In the 30% bracket, after cess, that 6.40% becomes about 4.4% in your hand. It is safe and predictable, and that has real value. But it is not a growth engine.

Now look at equity across different holding periods. A FundsIndia study of the Nifty 50 found that one-year returns were negative 23% of the time, falling to 6% over three years and becoming negligible beyond seven years. Over seven years, the lowest return on record was still 5% a year.

This is why the FD comparison is a snapshot, not a verdict. In each of the three episodes above, an investor who compared their SIP to an FD in the middle of the drawdown would have seen the FD "winning." The same investor making the comparison after the recovery would have reached the opposite conclusion.

There is one important exception, and we want to be clear about it. If you need this money within two or three years, for a home down payment or a child's admission, it should not be in equity at all. That is not a SIP problem. It is an allocation problem, and the fix is to move that money to safer options in a planned way, not to abandon equity for your long-term goals.

The Real Risk Isn't the Market. It's What Investors Do Next.

Markets recover on their own schedule. Investor decisions are what turn a temporary fall into a permanent loss.

The 2026 data shows this pressure building. In April, the SIP stoppage ratio hit 101%, meaning more SIPs ended than started. It has since eased, falling to 81.9% in July from about 91% in June. This ratio also counts SIPs that simply matured, so it overstates panic. Still, the direction tells you how many investors were reconsidering at exactly the wrong moment.

The long-term cost of this behaviour is measurable. A 20-year Axis Mutual Fund study found that regular equity funds delivered a 19.1% CAGR between 2003 and 2022, but investors in those same funds earned only 13.8%. The funds were fine. The gap came from investors entering after rallies and exiting after falls.

This is the core pattern: money flows in fastest when the index is near its highs and dries up when prices and valuations are lowest. A disciplined approach does the opposite. It keeps investing, or even adds, when markets are low, and moderates fresh allocation when they run hot. We wrote about this in detail in the performance-chasing trap.

Stopping a SIP during a fall does two kinds of damage. You skip the cheapest units of the entire cycle. And if you also redeem, you convert a paper loss into a real one. History consistently rewards investors who stay calm during crashes, not because they predicted anything, but because they did not interrupt the compounding.

Flat Prices, Cheaper Market: Why a Sideways Stretch Isn't Empty

A flat market is not a flat economy. While index prices have gone nowhere for two years, businesses have kept earning. When prices stall and earnings grow, the market quietly becomes cheaper.

You can see this in valuations. The Nifty's trailing price-to-earnings (PE) ratio, which tells you how many rupees you pay for each rupee of company profit, stood at about 20.4 at the end of August 2026, around 12% below its long-term average of 23.3. By mid-September, the PE had slipped below the levels seen during the 2022 Russia-Ukraine sell-off.

Put simply, you are now paying noticeably less for the same slice of corporate India than investors paid in September 2024. Over the long run, the Nifty and Sensex have compounded at roughly 12% to 14% a year, according to the WhiteOak note, which means the index has historically doubled every five to six years. A two-year pause does not erase that underlying growth. It widens the gap between price and value.

Here is the honest caveat. Valuations tell you about the odds over several years, not about next quarter. A lower PE only means something if earnings hold up. And nobody, including us, can tell you when this drawdown ends. What the data supports is a simpler idea: staying disciplined through a phase like this has historically been rewarded, while trying to time the exit and re-entry usually has not.

What Should You Do With Your SIP or Lumpsum Right Now?

Keep SIPs running for goals five or more years away. Deploy idle lumpsums gradually through an STP over six to twelve months. Move money you need within two to three years out of equity. And rebalance if your equity share has drifted far from your plan.

Use this checklist to find your situation.

If you have a running SIP for a long-term goal

• Keep it going. The current fall is buying you units at lower prices.
• If your income allows, consider a modest step-up. Falls are when extra rupees buy the most.
• Judge returns over a full cycle, not over the last two years.

If you have a lumpsum sitting in your savings account

• Avoid putting it all in at once to "catch the bottom." Nobody knows where the bottom is.
• Consider parking it in a liquid or low-duration debt fund and moving it into equity through an STP over six to twelve months.

If you need the money within two to three years

• This money should not be in equity, regardless of current returns.
• Plan a gradual shift to safer options instead of waiting to "get back to breakeven" first.

If your portfolio has drifted

• Check your current equity-debt split against your target. Our guide to asset allocation explains how to set one.
• Rebalance on a schedule, not on headlines.

What not to do

• Do not stop your SIP planning to "restart when markets recover." Recoveries rarely announce themselves.
• Do not redeem equity at depressed prices to lock into an FD for long-term goals.
• Do not switch funds based only on the last two years of returns.

Conclusion

Two flat years feel long while you are living through them. But the data gives three clear takeaways. First, this has happened before, in 2008, 2011 and 2018 to 2020, and SIP investors who stayed the course earned roughly 10% to 16% XIRR across those cycles. Second, the biggest risk is not the market but stopping a SIP or redeeming near the bottom, which turns a temporary loss into a permanent one. Third, the FD comparison depends entirely on when you measure it.

Every portfolio is different, though. Your goals, timelines and existing allocation decide whether you should continue, step up, rebalance or move some money to safety. If you would like a second opinion on your portfolio in this market, you can book a complimentary consultation with the Vinca Wealth team. We will look at your goals and help you build a plan you can stick with through cycles like this one.