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.
SIP Stoppages Are Climbing Fast
AMFI numbers show the stoppage ratio, SIPs closed as a share of SIPs opened, moving from 52.41% in FY24 to 75.63% in FY25, then 94.51% in FY26. In FY27(July 2026) so far it has crossed 91%. For every fresh SIP started this year, an existing one is being shut down somewhere else in the system.
Source: AMFI
The timing lines up with a period of flat, volatile markets, which points to investors reacting to a rough patch rather than to any real shift in why they started saving in the first place. Roughly 68% of all SIP AUM in India currently sits in accounts under five years old. Even in regular plans, guided by a Mutual Fund Distributor (MFD), only about 35% of AUM survives past five years. In direct plans it drops to roughly 21%. Most rupees invested through an SIP, in other words, never make it far enough to see the benefit an SIP is meant to deliver.
Source: AMFI, Data as of June 2026
What Actually Drives Short-Term Volatility
Equity is ownership in real businesses, and business earnings don’t move in a straight line. Interest rate cycles, input costs, global capital flows, sentiment swings – these push prices around within any given year, often more than actual earnings do. That’s why a one-year return can land anywhere from sharply negative to strongly positive with little rhyme or reason to it. Stretch the horizon out, and this noise gets diluted by the steadier force underneath it: businesses growing their earnings over time. Short-term ups and downs aren’t a sign that something’s broken. They’re just how equity behaves, and history shows this settles down predictably the longer money stays invested.
The Risk Numbers, by Holding Period
BSE Sensex rolling returns, January 2001 to December 2025, put this on paper:
| Holding Period | No. of Observations | Avg Return | Max Return | Min Return | Prob. of Loss | Returns > 10% |
| 1 Year | 8,766 | 16.72% | 110.38% | -56.26% | 20.61% | 57.56% |
| 3 Years | 8,036 | 15.42% | 62.30% | -8.82% | 2.69% | 64.88% |
| 5 Years | 7,305 | 14.76% | 47.26% | -1.60% | 1.18% | 72.48% |
| 7 Years | 6,575 | 13.28% | 29.38% | 3.69% | 0.00% | 71.07% |
| 10 Years | 5,479 | 12.60% | 21.20% | 4.06% | 0.00% | 72.53% |
| 12 Years | 4,748 | 12.63% | 20.83% | 4.63% | 0.00% | 78.77% |
| 15 Years | 3,653 | 12.56% | 18.07% | 7.28% | 0.00% | 84.83% |
| 20 Years | 1,826 | 14.42% | 16.98% | 11.62% | 0.00% | 100.00% |
At one year, roughly one in five outcomes has been a loss, with the worst single case wiping out more than half the money. Cross seven years and the loss probability across the whole dataset drops to zero. By twenty years, even the worst-recorded outcome came in at a positive double-digit CAGR. A separate check on timing tells a similar story: an investor with the worst possible luck, always buying at the annual peak over 25 years, still earned 11.95% CAGR. The luckiest investor, always buying at the annual bottom, earned 14.51%. That’s a gap of just 2.56% between the worst and best case. Staying invested carries far more weight than getting the entry point right.
Source: BSE, Jan 2001 – Dec 2025 | 25 years I SIP of Rs. 10,000/- and every year lump sum in highest and lowest value Rs. 1,20,000/-
Two Things Improve Together, Not One at a Time
Longer holding periods don’t just push the odds of a loss toward zero. The same years are doing the heavy lifting on compounding. Take a Rs. 10,000 monthly SIP, assumed to grow at 12% CAGR, roughly in line with the Sensex numbers above:
| Holding Period | Invested | Estimated Value |
| 5 Years | Rs. 6.00 Lakh | Rs. 8.11 Lakh |
| 10 Years | Rs. 12.00 Lakh | Rs. 22.40 Lakh |
| 15 Years | Rs. 18.00 Lakh | Rs. 47.59 Lakh |
| 20 Years | Rs. 24.00 Lakh | Rs. 91.99 Lakh |
Note: Assuming an average return of 12.62% p.a. as per AMFI Best Practice Guidelines Circular No. 109-A/2024-25 dated September 10, 2024.Past performance may or may not be sustained in future and is not a guarantee of any future returns.
Between year 10 and year 20, the invested amount just doubles, going from Rs. 12 lakh to Rs. 24 lakh. The estimated value grows over four times, crossing close to Rs. 91 lakh. This is the same stretch where loss probability had already hit zero. So the choice isn’t really between safety and growth. Holding on longer tends to hand you both.
What Stopping Actually Costs
Between October 1999 and April 2026, the Nifty returned 11.54% CAGR. The average investor over that same window earned around 9.04%, a shortfall of roughly 2.5 percentage points a year. The market didn’t cause that gap. Behaviour did – panic selling during corrections, SIPs stopped mid-downturn, re-entry only after the recovery was already underway and the cheap prices were gone.
The Takeaway
A rough one or two years in equity markets isn’t new information. It’s exactly the kind of short-term outcome the data already expects, and one that fades the longer an SIP is allowed to run. Understanding this before starting a SIP helps keep it from breaking midway through. For those already invested, the same understanding is what lets compounding do its job, quietly turning falling risk and rising returns into one story instead of two.
Before acting on a rough patch, it’s worth pausing and talking to an MFD. A quick conversation can help separate a genuine change in circumstance from ordinary market noise, and often that’s the difference between staying the course and giving up right before the numbers were about to turn.
The information contained herein is only for information and does not constitute, and should not be construed as investment advice or a recommendation to buy, sell, or otherwise transact in any security or investment product or an invitation, offer or solicitation to engage in any investment activity. Mutual fund investments are subject to market risks, read all scheme-related documents carefully.
