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The markets have lost over 35% due to the coronavirus pandemic. World over there has been a lot of panic in stock markets. In such a scenario is it prudent to start or continue SIP investments in equity funds? In this video we have analysed returns from SIPs that may have been started during two previous major crashes in the Indian economy – The dot-com bubble in 2000-2001 and the US Financial crisis in 2008. The numbers show that the best time to start an SIP is probably somewhere during the crash, and it is not the best if someone can time the market bottom. For the 2000 crash, if the investor was to start his SIP when the market had lost 40% from the top, the investor would make 22% returns in 10 years. Similarly, an SIP started when the markets had fallen 20% from the top during the 2008 crash would have fetched the investor a return of 11.9% per year.
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