Investors who started or invested a lump sum between July and September 2024, when markets were near their highs, have now spent nearly 2 years dealing with flat-to-negative returns, according to the latest study by WhiteOak Capital Mutual Fund.
The has gone nearly 700 days without making a new record high, its longest such stretch since 2012. Also, 38% of trading days in 2026 have seen negative 2-year rolling returns, the highest in over a decade.
But history suggests that a difficult entry point does not necessarily mean a poor long-term outcome. “History doesn’t repeat, but it rhymes,” the study notes.
What happened to investors in previous market downturns?
The WhiteOak Capital Mutual Fund study highlighted three periods of sharp falls or prolonged weakness.
| Period | Nifty 50 Monthly SIP XIRR |
| Jan 1, 2008 – Dec 31, 2009 | 15.0% |
| Jan 1, 2011 – Dec 31, 2012 | 10.2% |
| Jan 1, 2018 – Dec 31, 2020 | 16.3% |
*Source: WhiteOak Capital Mutual Fund
2008 global financial crisis
The fell around 52% in 2008, while a lump sum invested at the peak remained in the red for 5–6 years.
The study notes that many investors “questioned every SIP instalment” and stopped investing near the market bottom.
However, those who continued their SIPs “broke even within 18 months” of the crash and were earning an XIRR of 30% shortly thereafter.
A monthly SIP between January 2008 and December 2009 delivered a 15% XIRR.
2011 Eurozone debt scare
The Nifty 50 fell around 25% in 2011 amid European debt concerns and domestic policy paralysis.
After nearly two years of choppy markets following the 2009–10 rally, the index rebounded 28% in 2012 as risk appetite and FII flows returned.
A monthly SIP between January 2011 and December 2012 delivered a 10.2% XIRR, according to the study.
2018–2020 pre-COVID stall
Mid- and small-cap stocks remained “sideways-to-down” for nearly two years after the 2017 rally, before COVID triggered another sharp fall in March 2020.
Investors who entered at elevated valuations faced “almost 3 years of flat-to-negative returns,” according to the study. But markets more than doubled from the March 2020 lows within 12 months.
A monthly SIP between January 2018 and December 2020 delivered a 16.3% XIRR.
SIP vs lump sum: What should investors choose?
The study explained the January 2008 example. A SIP started just before the crash took around 18 months to break even. But investors who continued investing through the fall benefited from buying more units at lower prices.
Shortly after breakeven, the SIP was generating an XIRR of nearly 15%, as the low-cost units bought during the crash drove the recovery.
“Lump-sum investors had a harder road,” the study mentioned. Money invested at the 2008 peak remained red for 5–6 years, highlighting the timing risk that SIPs help reduce.
The study mentioned that “systematic deployment” through SIPs for regular investments and STPs for staggering lump sums is generally better than investing a lump sum at once.
Lump-sum investing may make sense when valuations are attractive, and investors can absorb “near-term volatility”.
What do flat or sideways markets mean?
A flat or sideways market does not necessarily mean a stagnant economy. The study noted that “nominal GDP has continued to grow”, along with corporate revenues and profits.
This means the value of businesses can keep rising even when their stock prices don’t. As a result, “valuations have quietly become more attractive, not less”.
The Nifty and Sensex have historically delivered around 12–14% annualised returns over the long term, doubling roughly every 5 to 6 years. So, when markets remain flat for 2 years while GDP and earnings grow, the gap between price and value can widen.
The study’s message for investors is clear. “Conviction should build through a stretch like this, not fade.” A prolonged period of weak returns can eventually create the conditions for stronger returns when the market catches up with underlying fundamentals.
What should investors do?
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Investor behaviour often works in reverse. “Money usually flows in fastest when the index is near its highs” and slows when markets fall, and valuations become more attractive.
The study suggests that the correct approach is to “allocate more when markets and valuations are low” and moderate fresh investments as markets move higher.
Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.