A calm checklist for SIP investors during volatile markets
Questions to ask before stopping, increasing or redirecting a long-term SIP after a sharp market move.
Return to the goal
A market move is easier to evaluate when the goal, horizon and required amount are written down. Money needed soon should not rely heavily on volatile assets, while a distant goal may have time to recover from normal market cycles.
Check whether the asset allocation has moved far from the planned range before changing the SIP itself.
Test contribution changes, not predictions
Use conservative, base and optimistic return assumptions instead of trying to forecast the next market move. Increasing a contribution with income can have a more dependable impact on a goal than chasing a higher expected return.
Review fund suitability, costs and risk disclosures, and avoid interpreting a calculator’s smooth line as the path markets will actually follow.