What market volatility means for SIP and mutual fund investors amid the Israel‑Iran escalation

The market meltdown today, March 2, 2026, is a stark reminder of how events throughout the world affect domestic investors.The Sensex dropped 2,743 points, and the Nifty slid 2%, reacting sharply to weekend tensions in the Middle East, where coordinated strikes by US and Israeli forces targeted Iranian sites.

Rupee cost averaging

When the market falls due to war or tension, your fixed monthly SIP amount buys more units of the mutual fund at a lower Net Asset Value (NAV). When the market eventually recovers, these extra units accelerate your wealth creation.

"These are times when discipline matters more than trying to predict what will happen next. A SIP follows rupee cost averaging. When markets fall, the same amount of money buys more units at lower prices. Over time, this helps in lowering the overall cost of investment. Compounding is what actually creates long-term wealth. When you stay invested, your returns start earning further returns. But this works only if you allow your money to remain invested without stopping in between. Market volatility may test your patience, but those who stay invested give compounding the time it needs to strengthen their portfolio year after year ," said Shweta Shashtri, who is a Certified Financial Planner (CFP).

Understanding your risk profile before investing is very important. It simply means knowing how much market ups and downs you are comfortable handling without panicking. Your portfolio’s asset allocation should match this comfort level.

"If you cannot handle high volatility, your investments should not be heavily tilted toward aggressive assets. Proper diversification across equity or equity-oriented schemes, debt and commodities adds stability to the portfolio," said Shweta Shashtri.

Expert tips for volatility management

1. Make sure your asset allocation is in line with your risk appetite. Do not go aggressive with a heavy equity portfolio if you feel panic with even a little market volatility.

2. Having safer assets like gold as a hedge in your portfolio will also help to manage volatility in your portfolio.

3. Do not stop SIP in panic. Market volatility is temporary, but compounding will work in the long term.

4. To handle situations like these, make sure you have enough Emergency or contingency fund set aside.

These tips were shared by CFA Shweta Shastri.

Market ups and downs are temporary. When markets stabilise, investors who maintain discipline, continue their SIPs, and adhere to their asset allocation typically profit.

Disclaimer: This article is written purely for informational purposes and should not be considered investment advice from Upstox. Investors should do their own research or consult a registered financial advisor before making investment decisions.