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News18
2 days ago
- Business
- News18
SIP At Peaks Or Bottoms? Market Timing May Not Be As Crucial As You Think
Experts say the probability of consistently investing in SIP at market bottoms is extremely low, making market timing an unreliable strategy Systematic Investment Plan, or SIP, is emerging as a popular investment method. It offers a means for disciplined investing, as you set aside a fixed sum of money every month for future savings. A SIP offers potential for long-term wealth creation, as you gain from the power of compounding and can get a diversified portfolio with just one investment, which is managed by an expert. But what is the right day to start a SIP? Timing matters a lot when you're batting – like finding the sweet spot on the bat. In mutual fund investing, it might matter a lot less. A study by Motilal Oswal Mutual Fund shows that investors who started SIPs at market peaks and those who began at market bottoms ended up with nearly identical long-term returns. The first period examined in the study was from 2000 to 2005, a time marked by the aftermath of the global bubble burst and the Indian market's subsequent recovery – a phase of high volatility. During this period, the Nifty 500 Index's price-to-earnings (PE) ratio swung sharply, peaking at 37.26 on February 24, 2000, and bottoming out at 11.58 on September 21, 2001. This minimal return disparity is attributed to rupee cost averaging, a key feature of SIPs, which helps smoothen out the effects of market volatility. The study reinforces the idea that regular investing across market cycles reduces the risk associated with market timing. Even though starting SIPs at the bottom of the market may deliver slightly higher returns in the short term, the advantage diminishes considerably over time. Experts point out that the probability of consistently investing at market bottoms is extremely low, making market timing an unreliable strategy. 'Time in the market beats timing the market," said Pratik Oswal, Head of Passive Funds at Motilal Oswal AMC. Financial advisors echo this view, recommending consistent and disciplined investing for long-term wealth creation rather than attempting to predict market movements. About the Author Aparna Deb Stay updated with all the latest business news, including market trends, stock updates, tax, IPO, banking finance, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates—only on News18. Also Download the News18 App to stay updated! tags : SIP First Published: July 30, 2025, 12:22 IST News business » savings-and-investments SIP At Peaks Or Bottoms? Market Timing May Not Be As Crucial As You Think Latest News Modi Govt's Efforts Put Terrorism On Global Agenda: Jaishankar During Op Sindoor Debate India Savings And Investments SIP At Peaks Or Bottoms? Market Timing May Not Be As Crucial As You Think Telugu Cinema Vijay Deverakonda's Kingdom To Give US Fans A Head Start With July 30 Premiere Viral Japan, Russia Tsunami: What Is Safe To Eat? Explained As Floodwater May Contaminate Food Bollywood Anil Kapoor Calls Anand Ahuja 'Heart Of The Family' In Special Birthday Post latest news
Time of India
15-07-2025
- Business
- Time of India
SIP investments: Does timing the market yield better returns? Here's what experts say
Are you planning to start investing in SIPs but worried that market ups and downs might hurt your returns? Many investors get caught up trying to time their systematic investment plan (SIP) contributions to coincide with the market's monthly lows. Tired of too many ads? go ad free now But a recent study by Motilal Oswal Asset Management suggests this effort may be largely pointless. The study found that over longer periods, the difference in returns, whether you invest at the highest or lowest point of the month, is negligible. For instance, in monthly SIPs made in the Nifty 500 index over a 10-year period, the return gap between someone who invested at the market's peak each month and another who managed to hit the bottom was just 1.13%. "The probability of being lucky and consistently investing at the lowest index value each month is mathematically close to zero," said Pratik Oswal, head of passives at Motilal Oswal AMC. Over a 10-year SIP, investors who consistently caught the monthly lows earned 15.82%, while those investing at the highs earned 14.68%, ET cited the Motilal Oswal AMC report. Though the margin is slightly more pronounced in the short term, the advantage fades with time. In a one-year SIP starting April 2024, for example, someone who hit the lowest point each month earned 1.17%. Meanwhile, an investor who unknowingly bought at the highest point every month saw a 9.9% loss, a stark 11.04% difference. 'SIPs should go through atleast one market cycle of 5-7 years,' said Amol Joshi, founder of Plan Rupee, was quoted as saying. By the five-year mark, the return gap drops to just 3.08%. Over 15, 20, and 25 years, the difference narrows even further to 0.73%, 0.71%, and 0.59%, respectively. Tired of too many ads? go ad free now Wealth advisors agree that investors are better off focusing on consistency rather than precision. 'Time in the market is important as it is impossible for retail investors to time the markets,' said Viral Bhatt, founder of Money Mantra.
Time of India
15-07-2025
- Business
- Time of India
Understanding SIPs: Why timing the market may not matter for long-term investors
Mumbai: Investors often obsess over capturing the month's lows when doing systematic investment plans (SIPs) in equity MF schemes, but timing barely matters. A study by Motilal Oswal Asset Management showed the return difference, irrespective of the date you invest, is minuscule over longer periods. For monthly SIPs done in Nifty 500 index for over 10 years, difference in returns for an investor who puts in money at the highest point of the month versus the lowest point is 1.13%. "The probability of being lucky and consistently investing at the lowest index value each month is mathematically close to zero," says Pratik Oswal, head, passives, Motilal Oswal AMC. For a 10-year SIP in Nifty 500 index, an investor who consistently managed to end up investing at the lowest point every month earned 15.82%, while one who invested at highest point earned 14.68%. Agencies In the short term, however, the strategy of catching the lowest point every month may bear fruit. For instance, in a one-year SIP starting in April 2024, the returns for an investor who managed to invest at the lowest point in the Nifty 500 index were 1.17%. The investor who ended up putting money at the highest point lost 9.9%, a divergence of 11.04%. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » "SIPs should go through atleast one market cycle of 5-7 years," says Amol Joshi, founder, Plan Rupee. As the investment horizon lengthens, this gap starts to fade. By the time it reaches a 5-year SIP, the difference falls to just 3.08%. The difference in these returns shrinks even more over longer periods. For 15, 20 and 25 years, the return difference narrows down to 0.73%, 0.71% and 0.59%, respectively. Wealth advisors said investors must focus more on investing consistently through SIPs over a longer period rather than trying to catch the bottom. "Time in the market is important as it is impossible for retail investors to time the markets," said Viral Bhatt, founder, Money Mantra.
Hans India
10-07-2025
- Business
- Hans India
Equity MF inflow surges 24% to Rs 23,587 cr during June
New Delhi: The net inflow into equity mutual funds surged 24 per cent to Rs 23,587 crore in June, reversing the declining trend of the last five months, driven by strong equity market performance across segments, data released by the Association of Mutual Funds in India (AMFI) showed on Wednesday. Also, the latest fund infusion by investors marks the 52nd consecutive month of net inflows into the segment. Akhil Chaturvedi, Executive Director & Chief Business Officer of Motilal Oswal AMC, said: 'There is confidence amongst retail investors which is reflected through the incremental flows, this is very healthy and positive for the industry and Indian markets.' According to the data, equity-oriented mutual funds saw an inflow of Rs 23,587 crore in June, way higher than the Rs 19,013 crore inflow seen in May. This was the first increase in net equity fund inflows after five straight months of decline. The net inflows continuously declined from Rs 41,156 crore in December to Rs 39,688 crore in January, Rs 29,303 crore in February, Rs 25,082 crore in March, and Rs 24,269 crore in April. Prior to this downward trend, inflows stood at Rs 35,943 crore in November. Himanshu Srivastava, Associate Director - Manager Research at Morningstar Investment Research India, said: 'This rebound underscores a resurgence in investor confidence, supported by a strong equity market performance across segments. Broad-based market gains, including a surge in the Nifty 50 index and even stronger rallies in the mid- and small-cap indices, helped reignite interest in equity investments.' While most equity segments posted healthy inflows in June, equity-linked savings schemes (ELSS) were the only category to record a net outflow of Rs 556 crore.
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Business Standard
09-07-2025
- Business
- Business Standard
Equity mutual fund inflows jump 24% in June, breaks 5-month decline
The net inflow into equity mutual funds surged 24 per cent to ₹23,587 crore in June, reversing the declining trend of the last five months, driven by strong equity market performance across segments, data released by the Association of Mutual Funds in India (AMFI) showed on Wednesday. Also, the latest fund infusion by investors marks the 52nd consecutive month of net inflows into the segment. Additionally, a healthy growth was witnessed in SIP (Systematic Investment Plan) inflow at ₹27,269 crore during the month under review, an increase from ₹26,688 crore in May. "There is confidence amongst retail investors which is reflected through the incremental flows, this is very healthy and positive for the industry and Indian markets," Akhil Chaturvedi, Executive Director & Chief Business Officer of Motilal Oswal AMC, said. According to the data, equity-oriented mutual funds saw an inflow of ₹23,587 crore in June, way higher than the ₹19,013 crore inflow seen in May. This was the first increase in net equity fund inflows after five straight months of decline. The net inflows continuously declined from ₹41,156 crore in December to ₹39,688 crore in January, ₹29,303 crore in February,₹25,082 crore in March, and ₹24,269 crore in April. Prior to this downward trend, inflows stood at ₹35,943 crore in November. "This rebound underscores a resurgence in investor confidence, supported by a strong equity market performance across segments. Broad-based market gains, including a surge in the Nifty 50 index and even stronger rallies in the mid- and small-cap indices, helped reignite interest in equity investments," Himanshu Srivastava, Associate Director - Manager Research at Morningstar Investment Research India, said. Within equity fund categories, Flexi Cap Funds recorded the highest inflows in June, attracting ₹5,733 crore. In addition, Small Cap Funds (₹4,024 crore) and Mid Cap Funds (₹3,754 crore) registered robust inflows. Besides, Large Cap Funds saw net inflows of ₹1,694 crore. Overall, the mutual fund industry experienced an infusion of over₹ 49,000 crore in June, higher than ₹29,000 crore in May. The inflow has lifted the industry's assets under management to a record ₹74.4 lakh crore as of June from ₹72.2 lakh crore at the end of May. "This growth (in AUM) continues to be powered by strong retail participation and the steady rise in SIP inflows," Venkat Chalsani, Chief Executive at Amfi, said. Apart from equities, hybrid funds sustained momentum with ₹23,223 crore in inflows in June, higher than₹ 20,765 crore in the preceding month, supported by arbitrage and multi-asset allocation strategies. This reflects rising preference for products balancing return potential with volatility protection, Ankur Punj, MD and National Head at Equirus Wealth, said. Gold ETFs witnessed a sharp uptick in investor interest in June, posting net inflows of ₹2,081 crore, making it the highest monthly inflow since January. This was in comparison to an inflow of ₹292 crore in May. "The robust inflows in June indicate a decisive shift in sentiment, likely supported by resilient gold prices, geopolitical uncertainties, and volatility in equity and fixed income markets, which have revived gold's appeal as a safe-haven asset," Nehal Meshram, Senior Analyst - Manager Research at Morningstar Investment Research India, said. On the other hand, debt funds registered a net outflow of ₹1,711 crore in the month under review compared to a₹ 15,908 crore outflow in May. Before that, the funds registered a staggering inflow of ₹2.2 lakh crore in April. This stabilisation was supported by recovery in several low and medium duration categories, even as institutional-heavy segments like Overnight and Liquid Funds continued to witness redemption pressures. These two categories together saw about ₹33,350 crore in outflows during the month, likely driven by quarter-end liquidity needs and treasury adjustments, Meshram said.
