Investor behaviour in SIP programs is a good indicator of behaviour, expectations, and conviction. If you look at where investors would start a SIP without the slightest hesitation, you will be surprised by how much that choice is driven by recency bias. While every investor knows that applying recency bias in a decision that has a five-year cycle time does not make sense, most people still cannot help doing so.
If you see how investors stop a SIP, it would reinforce the recency bias even more. Investors inevitably stop a SIP that is not performing well in recent years, only to shift it to another product doing great recently. Most investors believe that they get a better shot at succeeding in their SIP if they take validation from recency bias. Ironically, that is precisely what leads to failing in their SIP investing despite showing conviction in a SIP and investing regularly.
Investing regularly alone will not lead to success in a SIP. The choices must be made based on risks, return prospects and valuations. Starting a SIP in a less volatile product probably will do far better than a SIP of a high returns product when you start the SIP at the peak of a bull run. Similarly, a SIP can be stopped when recent returns are looking most attractive and started in a product with lower volatility. It may actually protect you from a sharp market downturn.
But, the obsession with recency bias rarely lets investors choose the right path. This leads to a furore against SIPs in every bear market. But, nobody learns their lessons and SIP behaviour in the current bull run clearly shows that more people make the same mistakes in every fresh market cycle.