Amid rising geopolitical tensions, tariff concerns, and global market volatility, mutual fund investors are grappling with a key question: should they continue their Systematic Investment Plans (SIPs) or pause investments until markets stabilise?

In a financial conversation with Zee Business, Rishikesh Palve, Director at Anand Rathi Wealth, and Kshitiz Mahajan, CEO of Complete Circle Wealth, shared insights on how investors should navigate the current market environment.

Rishikesh Palwe highlighted that recent market corrections, though uncomfortable, are not unprecedented. He noted that benchmark indices have seen a decline of around 6–10 per cent following recent geopolitical developments, placing the current fall within a moderate correction range.

“Historically, such corrections tend to recover within three to six months. Investors should view this as an opportunity rather than a setback,” he said.

Palwe explained that market falls can be broadly categorised into three types:

• 5–10 per cent correction: Typically recovers within 3–6 months
• 10–20 per cent correction: Recovery may take 6–12 months
• More than 20 per cent correction: Seen during major crises like COVID-19 or the global financial crisis, with recovery taking 1–2 years

He added that, on average, markets have corrected about 5.5 per cent during periods of war, with recovery often occurring within a month.

Both experts strongly cautioned against stopping SIPs during volatile phases. Kshitiz Mahajan, CEO of Complete Circle Wealth, stressed that timing the market is nearly impossible.

“If investors miss even a few of the best days in the market, their long-term returns can drop significantly. Most of these best days actually occur during bearish phases,” he said.

Palwe further explained that SIPs benefit from rupee cost averaging, allowing investors to accumulate more units when markets fall.

“Stopping SIPs during downturns defeats their core purpose. In fact, falling markets improve long-term returns for disciplined investors,” he added.

Experts recommended maintaining a well-diversified portfolio aligned with long-term goals. For investors targeting 12–13 per cent returns over the long term, Palwe suggested:

• 80 per cent allocation to equities
• 20 per cent allocation to debt instruments

Within equities, diversification across market caps is key:

• 50–55 per cent in large-cap funds
• 20–25 per cent in mid-cap funds
• Remaining in small-cap funds

“Asset allocation acts as a cushion during volatile periods and helps investors stay on track,” he said.

While certain sectors like banking, IT, consumption, travel, and defence may offer opportunities, Mahajan advised against investing heavily in sector-specific funds.

“A diversified portfolio is a better approach in uncertain times. Let fund managers take allocation calls rather than trying to time sectors,” he noted.

Experts unanimously agreed that investors should avoid panic-driven decisions such as redeeming investments or pausing SIPs.

“Short-term volatility is temporary, but long-term wealth creation requires patience and consistency. Investors should stay committed to their financial goals,” Mahajan said.

The key takeaway: despite global uncertainties, disciplined investing, continued SIPs, and proper asset allocation remain the most effective strategies for long-term success in equity markets.