SIP or Systematic Investment plans have caught up as a household name. Most people today choose a digital platform of choice and invest in monthly SIPs. While there is nothing inherently wrong with the approach, the uncertainty of the global economy coupled with India’s race to the viksit bharat title may cause multiple short term volatilities a.k.a panic points for the unprepared investor.
2025 has been filled with headlines so far. From wars to strikes and plane crashes, stock market has responded aggressively to each event. And by stock market, I mean the DIY investor- solely relying on headlines for portfolio decisions. According to AMFI data, an average of 40 Lakh investors discontinue their SIPs every month and yet the AUM of the Mutual Fund industry rose to 74 Lakh crore in June 2025, marking a 14.6% growth quarter on quarter. Interestingly, a major chunk-75% of this growth is mark-to-market.
Allow me to simplify this data. The panicked investor closing SIPs causes the market to fall even further, lowering NAVs for the retaining strategic investor- and growing his wealth, solely by staying pragmatic in his approach.
But why do people panic stop SIPs anyway? Is it just fear or a lack of a stronger binding force?
Monthly SIPs are a shot in the dark
You saw an ad in between the IPL match, then you saw it on a few billboards- ‘Systematic Investment Plan- the right way to invest your money’. “Ok”, you thought, let me search for what it is. That one thought led you to an ocean of content- from Sharan Hedge to Rachana Ranade. It’s basically everywhere. You download the highest rated app on “SIP investing” and choose the highest ranked funds. You start with any small amount and check it monthly for growth. “Let me give it a shot” was your thought. But as it turns out, it was shot in the dark.
No motive, no clear idea, no timeline or direction. Just monthly debits and a hope.
This certainty can’t be an investment strategy, right?
SIPs are to a financial plan, what a treadmill is to a fitness regime. It certainly helps, but can’t alone help you reach your goals.
To begin strategizing, you need to ask yourself-
1) What am I investing for? Is it a specific goal like a house, a car, or wedding planning? Generating high returns is also a very valid goal!
2) Which asset classes would best help me fulfil my goals? Equity/ Debt/ Gold in which ideal mixture?
3) Which investment options inside these asset classes suit my risk appetite? For eg- within debt, bonds are a great option for a conservative investor.
4) What ideal amount should I begin investing every month to reach my goals? And last but not least,
5) How often do I need to check/rebalance my portfolio for its optimal health?
2025 isn’t just about staying invested, it’s about staying intentional.
The Investment Platter is Expanding
Mutual Funds are a widely misunderstood investment option. They’re often seen as the “safe” way to enter the markets, but the truth is, they’re just a pool of funds, which can be created with so much more than just the top 100 companies’ index. This pool today is broader and more layered than ever before.
PMS (Portfolio Management Services) for the elite, and SIFs(Special Investment Funds) for the aspiring elite. Gift city funds for global exposure and REITs converting real estate into bite-sized income-generating units. Not to forget the alternative space where one can buy into startups, unlisted shares, private equity and so much more- all via Mutual Funds.
The monthly SIPs are great, but where they’re invested, and where they’re directed is the real question. 2025 is rewarding those who are boldly diversified. Those who can mix growth with stability, liquidity with long-term bets. The next generation of wealth builders won’t just “save regularly”; they’ll allocate smartly.
Yet, the modern investor seems more focused on saving 0.25% in expense ratio than exploring where that 99.75% is going. The DIY culture, while empowering, often sacrifices depth for ease. In trying to save pennies, many are missing the pounds.
The Stock Market is a Street Fight — No Rules Apply
You’ve read it in textbooks: when interest rates go up, bond prices fall. But in May 2025, as RBI hiked rates, bond funds rose. Why? Because real humans, not textbooks, run this market — and humans are emotional, irrational, and reactive. Logic says one thing, behaviour does another. When everyone expected a hike, the market had already priced it in. So the actual announcement came as a relief rally.
In truth, the market is more psychology than math. More sentiment than spreadsheets. Despite all the AI bots and robo-advisors promising formula-based decisions, the heart of investing still beats with human unpredictability. Take the recent gold rally for example, rising even as inflation eased. Or equity rallies during war headlines. It’s all a reminder: this is not a board exam. It’s a street fight. And in a fight, knowing the rules is less important than reading the room.
The best investors aren’t the most analytical — they’re the most adaptable. Adaptive to the new and aware of their internal biases. They don’t mind seeking human support because when markets defy logic, the right relationships step in to provide stability.
2025 is the start of a new era. As AI steps in to save hours of human time, it will inevitably be allocated for building greater things and when that happens, the right investor would be at the right place to take advantage of the opportunity.
Summing Up
As awareness for SIPs have grown and reached the masses, its intention has been lost in translation. It was always meant to be a tool, not an entire strategy. SIPs aren’t the problem. But they’re not the whole plan.
If your investment journey is driven by reels, robo-advisors, or app nudges — it may be time to pause and reset.
Ask yourself:
Is my SIP just a debit? Or is it a decision?
2025 is separating the passive from the purposeful.
The ones who stick to the plan from the ones who never had one.
The thinkers and adapters of today would become the riches of tomorrow.
Are you revisiting your SIP strategy this year?
FAQ
1. Are SIPs a bad investment strategy in 2025?
Not at all. SIPs are a useful tool for disciplined investing, but they aren’t a complete strategy. In 2025’s volatile environment, relying solely on SIPs without understanding asset allocation, risk appetite, or goal setting can lead to poor decisions and panic exits.
2. Why are so many investors discontinuing their SIPs despite market growth?
According to AMFI data, around 40 lakh SIPs are discontinued every month. This often happens due to fear-driven decisions and lack of a clear investment plan. Many investors react to headlines and short-term market movements rather than following a well-thought-out strategy.
3. Are there better investment options than Mutual Fund SIPs?
Not necessarily better, but broader. The investment landscape in 2025 includes options like PMS, SIFs, REITs, Gift City funds, and even alternatives like unlisted shares and private equity — all of which can be accessed through mutual funds too. Diversification is the key, not abandonment of SIPs.
4. How can I make my SIPs more effective in 2025?
Make them part of a broader financial plan. Choose funds aligned with your risk profile and goals. Avoid investing just based on app suggestions or expense ratios. Instead, focus on portfolio construction, asset mix, and regular reviews to ensure your SIPs support long-term wealth creation.
Read More:
Importance of Mutual Fund Distributors
Best Share brokers in Kanpur
