10 annual instalments. Current NAV is ₹29.9. How much market fall can each year's units absorb before going into loss — and why low NAV units are your portfolio's armour.
Current NAV is ₹29.9. Each bar shows how far the market must fall before that year's units go into loss. The red line is a 20% correction. Bars above it survive. Bars below it get hurt.
| Year | Buy NAV | Absorbs | After 20% Fall | Status |
|---|---|---|---|---|
| Year 1 | ₹10 | 66.6% | +139% | Safe |
| Year 2 | ₹10.2 | 65.9% | +135% | Safe |
| Year 3 | ₹11.1 | 62.9% | +116% | Safe |
| Year 4 | ₹12.5 | 58.2% | +91% | Safe |
| Year 5 | ₹14.4 | 51.8% | +66% | Safe |
| Year 6 | ₹17.0 | 43.1% | +41% | Safe |
| Year 7 | ₹23.3 | 22.1% | +3% | Safe |
| Year 8 | ₹34.6 | 0% | −31% | Hurt |
| Year 9 | ₹27.7 | 7.4% | −14% | Thin |
| Year 10 | ₹29.9 | 0% | −20% | Loss |
Shock absorption = (Current NAV − Buy NAV) ÷ Current NAV × 100.
This is the % fall from ₹29.9 needed before the unit reaches its breakeven.
NAV after 20% fall from ₹29.9 = ₹23.92.
Every unit bought at a low NAV is a unit of armour added to the portfolio. Not just in the sense of having a gain — but in the structural sense of being able to withstand a fall without going into loss.
In this 10-year scenario, units bought between ₹10 and ₹23.3 carry between 22% and 67% shock absorption — more than enough to ride through a 20% correction and still remain in profit. Only the peak-year and newest units take the full hit.
The investor who sees NAV rise and stops investing is removing themselves from the exact process that builds armour. The units they would have bought at lower NAVs — the ones that would have given them 40, 50, 60% of shock absorption — will never exist in their portfolio.
And when the correction comes — as it always does — they will feel the full force of the fall with no old units to hold the floor.
This is why the flat years — when NAV does not move — are the most valuable years in a SIP. Not because the portfolio is growing. Because the armour is being built at the lowest possible cost, one unit at a time.
The bull years reveal the armour. The flat years build it.