Prepare your SIP before the next market correction: Experts share a 5-point checklist
When markets tumble, emotions often move faster than investment plans. Investors start checking portfolios more frequently, wonder whether they should pause their systematic investment plans (SIPs) and look for signs that it’s time to make changes.
Experts say that’s precisely why important investment decisions should be made while markets are calm. Having a pre-defined plan can prevent short-term volatility from influencing long-term financial goals. From deciding when a SIP should actually be paused to setting a portfolio review schedule, here’s what experts recommend investors do before the next bout of market volatility.
1. Decide in advance what would justify changing your SIP
One of the biggest mistakes investors make is deciding whether to continue or stop a SIP while markets are already falling, says Aditya Mulki, CEO of Navi AMC.
Instead, he recommends setting clear rules when markets are calm. Investors should define the situations that would genuinely justify pausing or changing their investments, such as a loss of income, a major financial commitment or a meaningful change in long-term financial goals. When markets become volatile, the decision should be based on whether anything has changed in their personal finances, not on the market’s movements.
2. Build an emergency fund before you need one
Having an emergency corpus can prevent investors from disrupting their long-term investment journey during periods of financial stress.
Manish Srivastava, Executive Director at Anand Rathi Wealth, recommends maintaining an emergency fund separate from the investment portfolio so that temporary income disruptions or unexpected expenses do not force investors to stop their SIPs. Once the financial situation stabilises, investors should resume their SIPs at the earliest to stay on track towards their long-term goals.
Bhalchandra Joshi, Chief Business Officer and Chief Operating Officer at The Wealth Company Mutual Fund, says household financial stability should always come first. Continuing investments should not require investors to dip into emergency savings or take on expensive debt.
3. Don’t judge your investments by short-term performance
Market corrections often prompt investors to question not only their SIPs but also the mutual funds they are investing in.
Kaustubh Belapurkar, Director, Morningstar Investment Research, says investors sometimes discontinue SIPs because a fund has underperformed its peers over the short term. However, even well-managed funds can experience periods of relative underperformance due to market rotation or style headwinds. Unless there has been a change in the investment team or investment process, he says investors are generally better served by continuing their SIPs.
He also advises investors to keep a written record of their financial goals, intended asset allocation and investment horizon. Revisiting these during periods of market volatility can help ensure decisions remain aligned with the original investment plan rather than short-term market movements.
4. Review your portfolio on a schedule, not every day
Constantly tracking portfolio performance during volatile markets can amplify anxiety and lead to impulsive decisions.
Mulki recommends reviewing investments at predetermined intervals, such as quarterly or annually, instead of monitoring portfolios every day. A disciplined review schedule helps investors stay focused on long-term progress rather than reacting to daily fluctuations.
Similarly, Belapurkar says investors who have not experienced multiple market cycles may find it useful to work with a financial adviser, who can help prevent emotionally driven investment decisions during periods of uncertainty.
5. Have a plan to restart if you ever pause
Even when a SIP pause becomes unavoidable because of a genuine financial emergency, experts say investors should decide in advance how they will resume investing.
Joshi says a pause should ideally be accompanied by a review date or a clearly defined trigger for restarting investments. Otherwise, what begins as a temporary pause can quietly become a permanent break in the investment habit.
Varun Gupta, CEO of Groww Mutual Fund, also advises investors to seek objective guidance before making significant changes to their investment plans during volatile markets. Consulting a financial adviser, he says, can help ensure decisions remain aligned with long-term financial goals and risk appetite instead of being influenced by short-term market sentiment.
The common message from experts is that investor discipline is built long before markets become volatile. Putting simple guardrails in place, whether it’s defining the circumstances that warrant a change in investments, maintaining an emergency fund or following a disciplined review process, can help investors stay focused on long-term goals instead of reacting to short-term market noise.
