By the time the app is closed, a decision has quietly been made. The SIP will be paused this month. Maybe stopped altogether, until things “settle down.”
This exact moment repeats itself across lakhs of households every time markets turn choppy. It feels like a sensible, even cautious, response to a bad run of numbers. However, the data on Indian SIP investor behaviour, and on what equity markets have actually delivered over longer stretches, tells a very different story – one where the investor who stopped that SIP may have just made the costliest decision of their investing journey.
Problem 1: Timing Can Mislead
“The first problem is timing,” Mehta ji continued. “A point-to-point return depends entirely on its two dates. Change the end date and the number changes, even if nothing about the investment has.
“As on 30 September 2025, the five-year return of the Nifty Smallcap 250 TRI was 28.23%. The Nifty Midcap 150 TRI showed 27.47% and the Nifty 100 TRI 18.65%. Six months later, as on 31 March 2026, the same indices showed 16.34%, 17.50% and 10.30%. Same indices, same rules. Only the measurement date moved, and returns fell by 8 to 12 percentage points.”
| Index | 5-Yr Return · Sep 2025 | 5-Yr Return · Mar 2026 | 6-Month Drop |
| Nifty 100 TRI (Large Cap) | 18.65% | 10.30% | ▼ 8.35% |
| Nifty Midcap 150 TRI | 27.47% | 17.50% | ▼ 9.97% |
| Nifty Smallcap 250 TRI | 28.23% | 16.34% | ▼ 11.89% |
Problem 2: It Creates False Expectations
“The second problem is expectations,” Mehta ji said. “Suppose you had seen 28% in September 2025. What would you expect from your investment?”
“Probably something similar,” Rohan admitted.
That is the trap. Now imagine your fund gives you 15% a year instead. Over the long term, that is a healthy return. But measured against the 28% in your head, it feels like failure. You start doubting the fund, then the market, and one day you redeem. This is why many investors exit good funds at the wrong time. The fund did not let them down. The expectation did.
Rolling returns show what is realistic. Instead of one period, they examine every possible period within a long time frame. Daily rolling five-year returns from April 2006 to March 2026 cover more than 5,400 periods.
“Fewer than 13% of five-year periods in the midcap and smallcap indices delivered 25% or more a year. Across over 3,600 ten-year periods, none did. The median five-year return was 13.23% for large caps, 15.93% for midcaps and 13.25% for small caps. So the 15% that would have disappointed you is in line with, or above, what these indices have typically delivered.”
Problem 3: Chasing Recent Winners
“But my fund is at the top today,” Rohan said.
“That is the third problem,” Mehta ji replied. “In a study of 19 smallcap schemes, the scheme ranked first on one-year returns and ranked only 14th on three-year rolling return consistency between December 2019 and December 2025. Investors buy the top fund after a strong run, often near its peak. Performance cools, they exit at a loss and move to the next winner. Each switch quietly erodes long-term wealth.“
| Scheme | 1-Yr Point to Point Rank | 3-Yr Rolling Rank | What Happened? |
| Scheme A | #1 ⭐ | #14 ⬇️ | Fell 13 places in consistency ranking |
| Scheme B | #2 ⭐ | #13 ⬇️ | Also dropped significantly |
| Scheme C | #3 ⭐ | #7 ⬇️ | Moderate fall in consistency |
Numbers Are Only Half the Story
“Then what should I look at?” Rohan asked.
“Ask four questions,” Mehta ji said. “Are the returns consistent across market conditions? How often has the fund lost money? How did it hold up in 2008 and the 2020 COVID crash? Does it beat its benchmark consistently?”
“A single point-to-point return cannot answer these questions. It only tells you what happened between two dates. Rolling returns, by looking at every possible period over a longer history, give a much better picture of consistency and long-term performance.“
“But even the best analysis cannot pick a fund alone. The right choice depends on your financial needs, investment horizon, risk appetite, existing portfolio and how those needs change over the years.”
That is where an MF distributor adds value. The distributor understands the investor’s needs, sets realistic expectations, builds the right asset allocation and a diversified portfolio, then helps the investor stay with it through volatile phases, with regular reviews and rebalancing along the way.
“The fund is chosen once,” Mehta ji said. “The journey is managed for years.”
Conclusion
Many investors will recognise themselves in Rohan. Funds are often judged on a single point-to-point return, and schemes are switched whenever another fund tops the charts. What matters first is identifying the investor’s needs, horizon and risk appetite. When it comes to analysing performance, rolling returns are a far better measure than any single number.
Invest with clarity, not just recent numbers.
Source: NSE, AMFI. Past performance may or may not be sustained in future and is not a guarantee of any future returns.
Mutual fund investments are subject to market risks, read all scheme related documents carefully. This article is for informational and educational purposes only and does not constitute investment or credit advice. Readers should evaluate their individual financial circumstances and consult their mutual fund distributor before making any investment decisions.
