Stop Buying On Every Dip | The Right SIP Plus Lump Sum Strategy
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- Опубликовано: 8 июл 2024
- 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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I want to hold on to Cash for an entry point based on an indicator /RSI, But for a salaried person with savings of about 150k, I think an SIP may be more beneficial as holding cash for long period. But will parking cash like this provide stable returns?
Here you can do is to create some short time SIP's Or can do RD's so that you can invest some amount of cash punctually then use these saving to buy dips. Also you could contact an investment advisor for informed decision
Working with a financial advisor has been a game-changer for me. They provided invaluable insights and tailored strategies that aligned perfectly with my risk tolerance and financial objectives. With their support, I've seen significant growth in my investments and gained confidence in my financial future
Can you share details of your advisor? I want to invest my increased cash flow in stocks and alternative assets to achieve financial goals.
Sharon Lynne Hart is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
I searched for her name on the internet, found her page, and reached out via email to schedule a conversation. Thank you.
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.
What does rebalance mean
@@alok.01 selling underperformers
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 ..
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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.
Sir you may always choose mfcentral , it's good. That day i have invested at 2.57 PM, I have got allotment for the same day NAV...
Always buy directly from the website of the fund house before 1pm on the day of a huge fall, the NAVs will be placed as per the market price
@@pavanchennam4905you could also use mf center for same day amc
You guys following the proper trend . Bang on
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You guys made it very complicated.. generally all videos are simple.. thank you😊
Thanks for your precious feedback. Will share it with the team.
Beautiful insights
Wonderful. Thank you for your effort.
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eye opening,just dont try to time,max out sip once you can
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.
💯 exactly. No one is teaching this on RUclips. Everyone is asking to buy a dip which could be done earlier at much lower levels. If the dip doesn't come, the cash we saved will be wasted.
When we are doing SIP + lumpsum in dips, we are increasing our investments compared to regular SIP. So even if the overall returns percentage is the same, the final amount will be higher since the investment amount was higher
@@rajathjain6672 Good insight!
@@rajathjain6672Bottom line is that there should not be any untapped free money which was meant for market. Investing it either as sip or staggered is important.
We need to buy the same number of units during a dip. For example, if you've invested 5 lakhs and there's a 7% drop, we need to check the difference in NAV. Multiply the difference by the total units and purchase the same amount of units to achieve better results. Funding for only one year will not be sufficient
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.
Exactly my thoughts too
Precisely! Doing a lumpsump in Mid and Small cap would generate a lot of difference in Simple Sips and Lumpsump amounts. Due to more correction in them as compared to Nifty 50 and even more rally than it so the difference would increase
Insightful 🎉🎉
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.
Thank you
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Superb video. Thank you.
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Insightful video, quick question, when you say 5 periods for 5% correction, can this be 5 consecutive days since the correction from ATH or only one investment per month is allowed ?
Very insightful video , ET money is doing good research in common man's investment strategy of SIP.
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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.
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Excellent
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..
Very insightful , I will follow regular now
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@@ETMONEY absolutely, no doubt about that. I will make sure to share with them
Super analysis thanku et Money team
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Good one 👍🏻
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Good one ❤
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Sir,
Very nice inputs.
Am a student from IIM (First 3 in India) and learning by your content. Thanks for your very valuable content. Very useful insight always. All videos are helping to learn.
Request to share detailed videos on:
1. How we can identify today itself 'future disruptors' i.e. in the beginning itself? Kindly make a detailed video on same explanation from scratch to end (stock selection methods and process).2. Multi factor Investing combined like (Momentum, Value, Quality, Alfa) all factors finding for selected stocks
3. Quant Investing methods in cash segment stocks
Nice myth buster video! Loved it
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You should also analyse why the investments in 4th got NAV of 5th.
Great😮
Analysis assumes that lumpsum amount is waiting without any return, however anyone sensible will be holding lumpsum amount in a liquid or short term fund which would lead to much higher return...
You need to invest via lumpsum by 10% of your portfolio size and not just 1 year SIP amount.
v insightful video.
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Actually we should calculate the returns on whole investment portfolio and not only on equity portfolio. If dip is coming at higher level that amount could have been invested at much lower levels in regilar SIP. The equity returns could be higher but overall returns are lower.
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.😊
Thanks for your suggestion. Will share it with the team.
Great video but would love if you could also post the Nifty data of when it has corrected 5,10 and 15% along with the valuation chart. Or if you could provide the link to where you took the data from. Thank you.
Will share your request with the team. Please do share this video with your friends and family.
How will I know the future median PE now itself. Even 10 years earlier you don't know the current median PE
The return of placing the idle money waiting for allocation into equity from lets say a liquid fund at 6% is missing in the analysis. The idle money will not just sit back not doing anything
Though I believe a SIP could be more advantageous than keeping cash for an extended period of time for a salaried individual with savings of roughly $150,000, I still want to hang onto cash for an entry point based on an indication or RSI. But would stashing money like this yield consistent profits?
Here you can do is to create some short time SIP's Or can do RD's so that you can invest some amount of cash punctually then use these saving to buy dips. Also you could contact an investment advisor for informed decision
I have never felt more confident about my financial future or experienced significant growth in my investments than I have with the help of a financial advisor. They have given me priceless insights and customised strategies that perfectly match my risk tolerance and financial goals.
Can you share details of your advisor? I want to invest my increased cash flow in stocks and alternative assets to achieve financial goals.
TERRI ANNETTE MOORE is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
I searched for her name on the internet, found her page, and reached out via email to schedule a conversation. Thank you.
How to identify index valuation is below 15 percent explain by calculation on a 7 year term basis
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.
And I think most investors would agree that possibility of higher accumulated corpus is more desirable than higher XIRR.
Hello Team,
You people are making Remarkable videos in Indian Context, Happy To Watch Your videos...
In India Generally Matured Mutual Fund Investors Speak about 2 AMCs, Surely not about India's largest AMCs SBI, HDFC & ICIC, they are quant & PPFAS, So here I request you to make a detailed video of these 2 fund houses with respect to NIFTY 50,SENSEX, NEXT 50,MIDCAP 150 indexes...
Thank you, I hope you will make it for the Betterment of Indian Investors...
We have a video on Quant vs PPFAS: ruclips.net/video/suSR0hHA9LQ/видео.html. Hope you will find it useful.
@@ETMONEY Ty dear for your reply, in future while comparing these two kindly add Respective Indexes performance also.
Yes may be AMC was not buying the units it is better to go with ETF
I am surprised after seeing this video. Shoking results
Yes, indeed, they go against the common perception.
Great video, I will follow
i wan to invest 5000 INR in month in MF but suppose last week of month i want to invest lumpsum 2000 more or less depend on what's available with me on last week of the month, so is there any changes in returns? lumpsum amt changes from 1000 to 5000 every month or sometimes O zero, looking forward for your answer, need calculation for atleast 10 years.
do SIP every month and instead of tracking index to generate extra 1% rather focus on your primary skills and upgrade it that would give better returns than 1% extra.
This is all good as theory
Why we never get Same day NAV in ET Money
no, what I usually do, is suppose one MF 2000 is a monthly SIP, so I divide it in half and do simple SIP 1000 and when the market is doing down up to 5% I add the other half on the same month, (kindly note this will not work with Large cap MF)
Better to do Turbo STP from Aditya Birla where the amount is transferred more to equity fund when NAV falls to certain %
Irony is that this RUclips channel parent Etmoney has stopped automatically showing quant funds in their comparison sheet... Because Quant might not be giving them satisfactory trailing commission..
We have only direct mutual funds on the app. So we don't get any commission :)
What happens to the dividend declared by index companies in Index ETF ?
It gets reflected in the NAV of the units and thus gets passed on to unitholders.
Is it works for Mid & Small cap fund for 20 years Investment period??
Let me forward your request to the team. We can then plan a video around mid and small caps too.
Can you try this strategy by changing the lumpsum amount ? I think at lower values it would make more sense even with 5% correction i think backtested data might show some benifit
One can always say I will put more. But how many of us really keep money in a bank account for investing during market corrections
Kudos to the analytics team.
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I invest lump sum amount only when the average nav is closer to that in a short period like two years. If the sip more than five years, i won't invest for the fall of 5 percentage
Don't find this plain analysis very useful. Instead, you should have worked on dip in daily moving average on various periods (5, 10, 20, 60 days, etc).
If a market rises by 3% and the next day falls by 3%, will you invest because it has fallen? No. That's why the difference in moving average is a better measure than plain current dip%.
nope. It is people who think that making things complicated will get them more results and find it shocking that someone who does trading all day loses to some guy who forgets his SIPs for 10 years.
Scenario u mentioned is probably the reason why +lumpsum doesn't give extra return, as expected
This would make for a great followup video, @ETMONEY.
Yes. Couldn't agree more. imo, If there is a nifty dip of around 5-10% compared to last 30-60 days, may be investor might dump some amount. Also, those who do regular SIP can understand this better. For example, if there is a SIP on 5th of every month and you find a pattern of getting more units (if nifty is in downtrend) from past 2 months, then investor can come think of this as a dip and invest some lumpsum amount. As you said, moving average on long periods should be considered as a dip rather than just a day before for regular SIP follower.
when i buy during a dip in quant elss tax saver fund in zerodha coin the processing takes like 3 days long within that timeframe i lose the dip and get lesser returns
Yes, the delay happens when buying through the distributor.
However there is no delay if you buy directly from quantmutual site and paid through their preferred/linked banks (hdfc, icici, axis etc. )
Good luck
If you make the payment before 2pm, technically you should get the same day's NAV, though it might take a couple of days for the units to be allocated. However, sometimes the AMC can say it didn't receive the payment before cut off time and thetlrefore allot you the next day's NAV. It happened to a large number of investers on June 4.
@@SenthilKumar-gy5lh i'll try that
@@sridhar264 may i know the app name??
may be data should be checked twice again :) ...major point is missed: Corpus generated at the End of both exercises 😁
What is Price vs valuation correction
Actually instead of showing the returns in percentage..it should have been explained in terms of amount of return achieved...there we can find the actual difference
Can you kindly share your thoughts on Mutual Fund nasdaq 100 index fund direct growth , In which one we can invest in SIP mode, is it advisable ? Any insights?
Hello, most international funds are closed for inflows now as the RBI limit of foreign investments by mutual funds has been breached. However, one can still explore NASDAQ 100 ETFs. We recently discussed them in our AI video: ruclips.net/video/6Egon5v9cOs/видео.html
5:04 - My jaw DROPPED
Indeed, many of our viewers would have the same view. Please don't forget to share this video.
What is maxing out sips?
It means investing via SIPs as much as possible
@@ETMONEY Thank you for the prompt response.
If you invest a lumpsum on ET Money on the day of the dip, your order will be executed after a day or two when the opportunity is already missed. ET Money is very slow for lumpsum investments and doesn't provide clarity on the NAV date before investing.
But I feel, the Etmoney genious is worst plan.
1. 6 months back it was charging 50/month, now it is 400/month
2. Every month it is rebalancing the portfolio. which is leading high STCG tax
Can you explain the same through an informative video.
I am investing only in smallcap funds and getting annualized returns in between 32 to 57 percent (more than 3 to 5 year). My investment horizon is long long time. Is it right way to invest. I always invest in lumsum.
June 4 ko kitna minus hua tha portfolio
@@skhustlerminus 5 percent.. from 55 percent SC+30 Percent MC +Rest LC.
This may not be the best way as you are taking high risk by investing only in small caps. Small caps should be no more than 15% of your total portfolio. You may want to diversify better.
Never explained ‘WHY’??
Ideally it should work but didn’t understand WHY it didn’t
Lump Sum should be used has LIFO method when every you met 10% profit
Shankar has made this video long ago on his channel. Is video idea copied?
Mukesh Kalra - Improve your service..
If we invest as lump sum when market fall, allotment is done a day later , so effectively when market starts correcting
You may have definitely research on it very well but na jane kyu mere ko lagta ha buy on dip is also a never 2nd grade option .
Haha! We know the thrill of knowing we have timed the market when we buy on dip. It's not a 2nd-grade option just needs to be applied intelligently.
I think the lumpsome shd be way much higher than the sip amt it should aim to reduce ur avg unit price of MF.
You mean invest in ETF nifty 50?
The research is based on the Nifty 50 but we don't intend to make any recommendations. You should make your own investment choice after doing thorough research.
You can’t buy on dip bcz ur not getting same day NAV even when u apply before 2pm
With all due respect, the concept that you are sharing in this video is Simply rupee cost averaging and downward cost averaging, It is a familiar concept in stock you're just replicating it in mutual funds.
Quant mutual fund issues ..
Quant schemes are now active on ET Money
When you will review ET money genius
But if u posted same post in hindi also it would have been better
All our videos are also available in Hindi on our Hindi RUclips channel. Please visit: www.youtube.com/@etmoneyhindi
Flawed assumption. The amount for lump sum should accumulate at the rate 10k per month. Hence, if the market falls by 5 percent in the first month, max investment should be 10k only.
Let me burst this bubble right here. A yearly SIP of 1.2 lakh per year for 10 years will fetch more returns than a 10k monthly SIP for 10 years. I've done the math. If you go beyond 11 years a monthly SIP will beat the yearly SIP returns
Ur app doing bad job ..where is ur mutual fund withdrawal button in ur et money app.??button disappears in recent update check and resolve then do this video's
Its in 3 dot?
@@dark_knight439 no bro In the app when I click on 3 dot withdrawal option not seen
PLEASE ALLOW US TO INVEST IN OUR EXISTING QUANT FUNDS. INVESTORS ARE LOOSING BIG TIME.
We are working on the issue. Will keep you posted if there is a new development.
Sorry, I'm not liking this video since the video was generalizing whole investment horizon, but forgot to notify the viewers that this is video doesn't talk about different permutations & combinations (may be not intentional, but it is failed to highlight that point of view) and thus missing significant amount of details.
Example -
When Nifty 50 down by 5%, it is more likely that the other quality mid and small cap indices, funds or stocks might down more significantly (example June 4th) and thematical or sectorial might drop even more, which are likely to bounce more when the myths are cleared and that type of lump sump investments generate more wealth.
Quant mutual fund theek karo yaar. I can’t modify anything 😓
Hello, we are happy to inform you that Quant schemes are back on ET Money now.
Don't agree with whats shown in the video. If you dont stop ur regular sips and buy on dips, surely the returns are way higher
The assumption of using only one dip in a month itself is a flawed.
Well, as we said, we had to make some assumptions. You can always try doing your own calculation with differrent assumptions
I think your Channel Confuses people more Than Clearing their Doubts. Your Channel don't know how to deliver the correct message 😢😢😢
How do we confuse? By using data and showing multiple scenarios so one can really understand it?
I think its much better and easier to continue SIP for 10-15 yrs, rather than looking for putting lumpsum when market is down.. its not that easy also to go through the pain of market going down..
I stopped watching this video immediately after reading the first free comments. Thanks guys!
We can only say you have missed knowing something really interesting.
What nonsense. I made quite a few lumpsum investments in tech funds when they were down 2 years ago and my returns now are superior compared to regular SIPs
Forget what they recorded.. but one thing is you can expect - THE WORST CUSTOMER SERVICE. Everything is offline and nothing direct interaction..
If this is for MFs, they don't always invest in Nifty 50 stocks ... There will not be any advantage in that case
Kuch samaz nahi aaya sir 😢😢
This is really insightful.. thanks etmoney.
Thanks for your encouraging words. Please help spread the message by sharing this video with your friends and family.
Totally not understand bro...
I don't agree with your results.
आपकी सहमति से कोई फ़रक नहीं पड़ता।
S I P mutual funds. Please Don’t make fool poor people with SiP scam 😮Sip se crore pati
2019 15 crores value in 2024 only 5 crores
Now you think
2024 2crore value after 20 years with 8% inflation only it will worth only 40 lakhs but you will can’t buy anything good with 2 crores after 20 years
1980 what you could buy with 1 lakh same plot in 2024 worth 10 crores so after 20 years with inflation you need more than 100 cr
Only Gold can save you
video made by you is create confusion , no use for investor..please do not make like this video s
Are you saying that data that proves buying just because the market fell from an ATH doesn't help investors? And that markets falling when they are overvalued is a better option to take benefit from the dips is of no use for investors?
Hehehe one of the worst videos of ET MONEY. I’m completely against it 😂
Let's agree to disagree on this!