Stop Buying On Every Dip | The Right SIP Plus Lump Sum Strategy

A lot of smart investors use the SIP-plus-lump sum strategy for better returns. They maintain an ongoing SIP in mutual funds, and when markets fall, they invest a lump sum amount to benefit from market corrections. Recently, on 4th June, we saw markets fall close to 6% following unexpected election results. On that day, many investors seized the opportunity to invest lump sums, aiming to capitalize on the correction.

But does this strategy work? In this video, we dive deep into the data to find surprising answers. We'll explore three key aspects: the type of correction (whether to invest when markets fall or when valuations are low), the size of the correction (ideal investment points at 5%, 10%, or 15% drops), and the optimal investment horizon to maximize returns with this strategy. Watch the video to discover which combination of variables produces the highest returns and how you can optimize your investment strategy.

Chapters
00:00 Introduction
02:00 Key assumptions taken for the analysis
04:28 Buying on dips - easy way to earn more returns?

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[SPR]

My SIP is on 5th of every month for last 3 years. Don't bother at looking the market. Do analyze the portfolio twice in a year. Rebalance every year as required. That's it.

[rohitmaligoogle]

You guys following the proper trend . Bang on

[Daanyy]

First it's difficult to time the market.

Morning you see market is up and by afternoon it goes down or vice versa.

There are rare chances that this strategy will work in ur way..

I will share my personal experience with it. I have a monthly sip, considering the market was down on the 4th June I pooled a good amount(lum sum), the transaction was executed well before the cut off time..

However to my surprise I got a nav of 5th June when the market was up by 1000 points, I raised a complaint to the broker informing about the same, they agreed that my point was right, however they blamed it to mutual fund, I contacted mutual fund they blamed NSC that it was due to technical glitch. Days later it was in news that this was raised by many people.

NSC clarify that there was no such issue from there end

So it was merry go around..

[somendrasarkar]

Insights are quite compelling. They reinforce the idea that sticking to simplicity, like consistent sip and adjusting the amuunt with hikes, is often the wisest approach over long term. After all stress adjusted return is also one of the things ..

[ARUN]

On June 4 many retail investors place order but AMC couldn't process so it didn't it work when market sudden fall i think.

[MrVineetkumargupta]

One is percent returns. If one buy on dips and invest, one may be investing earlier than regular SIP schedule, so absolute returns will be still bigger due to longer time horizon.

[knayak]

The conclusions are mathematically proved by many people. People have also worked out scenarios where SIP periods are varying from weekly, monthly quarterly or Annually. There isnt much difference in the long term.
you can calculate separately the strategy to invest lumpsum money equivalant to total annual SIP but on dips as per your dip scenario, at the end of say 10 years, amount invested will be same and returns will not differ greatly. So by combining monthly SIP + buy on dip strategy, results are not expected to be greatly different.

[aayushrai]

This also depends on where you invest in the event of a correction. This example assumes that the investor would invest in nifty50 index. If the market corrects by 5%, the likely scenario is that midcaps and smallcaps will correct by a lot more. So it's not just about buying the dip but understanding which index or sector has seen the most correction to identify the right opportunities.

[bikashliju]

It shows discipline win over everything

[PratikRamanuj]

Great video. Insightful. It proves that by doing lumpsum with SIPs during correction doesn't help that much. But is it true for Small and Mid cap funds? Please do this analysis for Small and MidCap funds.😊

[jaym]

Very insightful video, ET money is doing good research in common man's investment strategy of SIP.

[ayushgp]

You should also analyse why the investments in 4th got NAV of 5th.

[soumyachatterjee]

As a beginner in Mutual Funds, can you share some videos in how to start or detailing the basics please? Btw thank you for the continued support! 👍

[deepakgadekar]

You guys made it very complicated.. generally all videos are simple.. thank you😊

[srinivasaraju]

COULDNOT BELIEVE. VERY USEFUL VIDEO. NOW I WILL WATCH ALL YOUR VIDEOS AND. I WILL INVEST IN ETFs IN CORRECTIONS.

[saikiranlankalapalli]

Great insights with in-depth analysis 🙌. It provided a different take on the technique of SIP + Lumpsum investing on different market corrections. Emphasizing on the idea of disciplined investing through SIPs, not stopping them and to invest one's bonus will always help to increase the size of retirement corpus / goal based allotted amount and these pointers should be part of investor psychology. Apart from that, if it is difficult to track everything, Annual Step-up SIP anywhere between 1-10% is a great approach for Wealth creation without any knee-jerk reactions irrespective of the time frame.

[MartianInvestor]

It would be more insightful to see what is the difference in final accumulated amounts by using the strategies. I think more time in the market would lead to higher accumulation.

[anushravdixit]

I am surprised after seeing this video. Shoking results

[pallav]

Hi, you missed out on the assumption that the idle cash will also generate some return if pit into alternative investment classes or simply FDs/liquid funds which would increase the returns for buy the dip

[sp-yeht]

Nice efforts.. however i think there are 2 flaws in this analysis.
1. The amount and the no.of dips was assumed to be limited.., if not this the returns works be definitely more even.
2.u considered a instrument that is not so much volatile..