The Compounding Life

Sapna Jain  ·  Editor

The Number That Changes Everything You Think About Timing

When I was putting this issue together, I kept returning to a single number. Not a Sensex level. Not an NAV. A count: the number of clients who started their SIPs in 2016 and are still running them today, unchanged, uninterrupted, unremarkable in their consistency.

Some of them have lived through demonetisation, the IL&FS crisis, the pandemic crash, a war in Europe, a rate cycle, and everything else the headlines could manufacture. And through all of it, their SIP instruction — set up ten years ago — has quietly run every single month. No call to us. No changes. Just time, doing what only time can do.

This issue is dedicated to that kind of investor. Not the sophisticated one who understands every ratio. The consistent one. Because consistency, it turns out, is the rarest and most valuable quality in this business.

As always, if something in this letter raises a question about your own plan — write to me. I read every message.

Sapna Jain
Editor, The Compounding Life  ·  [email protected]

May 2026  ·  Five takeaways, contextualised by Sapna Jain

What May Told Us — and What It Didn’t

Rupee Cost Averaging: An Honest Explanation Without Jargon

Finance has a gift for making simple things sound complicated. Rupee Cost Averaging is one of the simplest ideas in investing, and one of the most dressed-up in unnecessary language. Here is the plain version, with no jargon.

When you invest a fixed rupee amount every month — as a SIP does — you automatically buy more units when prices are low and fewer units when prices are high. You do not decide this. The arithmetic decides it. ₹10,000 at a NAV of ₹100 buys you 100 units. The same ₹10,000 at a NAV of ₹80 buys you 125 units. Same money. More ownership. No extra effort on your part.

Notice what happened in the illustration above. The market did not return to where it started. It only partially recovered. And yet the investor is in profit — because Rupee Cost Averaging lowered the average cost of every unit they own. The dip did not damage them. It benefited them. The person who paused their SIP in February and March missed exactly the units that are now doing the work.

An honest caveat deserves a place here. Rupee Cost Averaging is not magic. It does not guarantee profits, and it does not rescue a bad fund. The quality of what you own matters enormously. Cheap units in a poorly managed fund are still cheap units in a poorly managed fund. The mechanism works because good businesses, bought consistently and patiently, tend to be worth more over time. RCA accelerates that process — it does not replace the need for quality at its foundation.

The other thing RCA does, which no spreadsheet can fully capture, is remove the anxiety of timing. You no longer need to answer the question: is now a good time to invest? The answer is built into the process: every month is the time. Some months will turn out to have been better than others. You will not know which ones in advance. You do not need to.

Ten Years, One Instruction: A Tinsukia Family’s Story

I want to tell you about a family. I will not name them — their privacy matters more than the story’s colour. But they live here, in Tinsukia, and most of you know the kind of household I mean: a government employee, his wife, two school-going children, a modest but steady monthly surplus, and a clear and specific goal. They did not want to be wealthy. They wanted to be secure. They wanted to not worry about money at the moments in life that mattered most.

In early 2016, they started a SIP. ₹8,000 a month, split across two equity mutual funds. Nothing glamorous. No concentrated bets, no thematic calls. Just two well-managed diversified funds, a standing instruction, and a handshake agreement with themselves that they would not touch it.

The early months were unremarkable. Returns were modest. Life was busy. The SIP ran in the background like electricity — invisible, unnoticed, doing its work. Then came the tests.

November 2016. Demonetisation. Markets fell sharply in a matter of days. Their portfolio was down. They did not pause. 2018. The IL&FS crisis unravelled across several months, pulling quality NBFC and finance stocks with it. Friends advised them to step back and wait for clarity. They did not pause. March 2020. The pandemic crash — the fastest 35% fall in the history of Indian equities. Relatives called. WhatsApp was apocalyptic. One family member, with the best of intentions, sat with them and explained why this time was genuinely different. They listened politely. They did not pause.

The SIP never missed a month. Not in a decade. Not through demonetisation, the NBFC crisis, a global pandemic, a war, a rate cycle, and everything else the last ten years could manufacture.

The number at the end of those ten years surprised even them. Their daughter’s college education is fully funded without a loan. Their retirement corpus is materially ahead of where they expected to be at this stage of life. And the most important input in that outcome was not the fund selection, not the asset allocation, not the market conditions. It was the standing instruction that ran every month without asking their permission.

I tell this story not because it is exceptional. I tell it because it is repeatable. The dips they lived through — 2016, 2018, 2020, 2022 — were not threats to their wealth. In retrospect, and through the mathematics of Rupee Cost Averaging, they were contributors to it. They will never know exactly how many cheap units they accumulated during those months. The number is somewhere in their corpus, quietly compounding, indistinguishable from everything else. That invisibility is the whole point.

The Investor Who Waits Is Always Waiting

I have met this investor many times. Smart, informed, genuinely interested in doing things correctly. They follow the news. They understand interest rates. They have a view on the rupee. And they are always, perpetually, waiting for the right moment to invest. Waiting for the market to fall a little more. Waiting for the election to be over. Waiting for the global situation to stabilise. Waiting for the next earnings season to provide clarity.

The market, for its part, never announces the all-clear. The signal they are waiting for does not arrive in a form that feels conclusive. And so the waiting continues — expensive, patient, disciplined in the wrong direction.

A SIP solves this not by giving perfect timing, but by making timing irrelevant. You do not need to be right about the market. You do not need to be brave. You need only to be consistent. That is the one edge that any investor — regardless of financial knowledge, regardless of wealth level — can reliably hold onto. The Tinsukia family in this issue did not have better information than anyone else in 2016 or 2020. They simply had a standing instruction and the quiet wisdom to leave it alone.