BEHAVIORAL SHIFTS AND SENTIMENT ANALYSIS OF SIP INVESTORS DURING THE 2021–2025 MARKET CORRECTION

Abstract

The research project titled “Behavioural Shifts and Sentiment Analysis of SIP Investors During the 2021–2025 Market Correction” examines the emotional and behavioural responses of Indian SIP investors during a prolonged period of market volatility. The study dives deep into how investors navigated one of the lengthiest correction phases in recent history and highlights the role of sentiment and psychology in financial decision-making. Systematic Investment Plans (SIPs) are promoted as a disciplined way to achieve long-term financial goals, regardless of short-term market fluctuations. However, the extended correction during 2021–2025 challenged this principle, putting investor confidence to the test. This study explores whether decisions made by investors—such as continuing, pausing, or exiting their SIPs—were rooted in logical analysis or influenced by emotions like fear and doubt, further amplified by external factors such as media narratives. The research employs a mixed-method approach, combining primary data collected through surveys with secondary market data obtained from credible sources like AMFI and SEBI. Using statistical tools such as SPSS, investor actions were analysed alongside mutual fund performance metrics. Emotional sentiments were classified into positive, neutral, or negative categories based on open-ended responses to understand the psychological landscape behind their investment behaviour. Key findings reveal that while many investors showed resilience by continuing their SIPs, a significant portion acted emotionally, either pausing or exiting despite reasonable fund performance. Positive sentiment emerged as the driving force behind investment continuity, whereas negative sentiment correlated strongly with hesitancy and withdrawal. Income levels and direct versus regular mutual fund plans also played a pivotal role in shaping investor confidence. This project underscores the human aspect of investing—highlighting how emotional factors can outweigh rational calculations during uncertain times. By offering insights into investor behavior and sentiment, the study provides valuable recommendations for mutual fund companies, financial advisors, and fintech platforms to enhance investor guidance and communication strategies during volatile market periods.