Stop SIPs in a market dip? You miss the real gains, says Capital League’s Rajul Kothari

Rajul Kothari, Partner at Capital League

At a time when new investors are uncertain about whether to continue with their SIPs during market downturns, Rajul Kothari, Partner at Capital League, advised young investors that halting investments during market dips could cost them in the long run.

“The concept of rupee cost averaging, which is derived from dollar cost averaging in SIPs, works only if you continue investing during market downturns. If you stop your SIPs when the market falls, you miss out on the opportunity to earn higher returns over time,” Rajul explained during a panel discussion titled "Young and Wealthy: Instilling a Savings Mindset Among the Youth", held on the sidelines of Network18’s Rising Bharat Summit.

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Rupee cost averaging is the core principle behind SIPs. When you invest a fixed amount regularly—typically on a monthly basis—you purchase more units when prices are low and fewer when prices are high. This helps to average out the cost per unit over time and cushions the impact of market volatility.

Rajul also pointed out how easy it has become for anyone to open an account on a fintech platform and begin investing instantly. However, she emphasized that this ease often comes without any proper framework—there is little understanding of one’s risk profile, no defined investment goals, and this is an area where significant improvement is needed.

Touching upon the mindset of today’s youth, Rajul stressed that society as a whole needs to revive the thoughtful approach that used to precede spending decisions.

“We grew up in a time of scarcity, but today’s kids are surrounded by abundance. The shift in mindset requires a collective response—especially from parents, who need to lead by example. They must instill a sense of responsibility and mindfulness around spending. Instant gratification is fast replacing the joy of simple pleasures,” she said.

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