SIP Investment- If you invest in the stock market, then you must have heard about SIP (Systematic Investment Plan). It is a common belief among investors in the market that investing at the right time gives good returns. But this has been revealed in a study by Motilal Oswal Mutual Fund. According to the report, whether the time of starting investment in SIP (Systematic Investment Plan) is at the upper level or at the lower level in the market, both the investors get almost the same return in the long run.
The PE ratio of the Nifty 500 index was 37.26 (highest) on 24 February 2000 and 11.58 (lowest) on 21 September 2001. The result is that the investor who started SIP in February 2000 got a CAGR of 15.47%. The one who started SIP in September 2001 got a CAGR of 15.55%. That is, both the investors got almost the same return, while the market conditions were completely different.
2006-2010: Global recession and recovery
During this period, the stock market saw a rapid bull run, then the global recession of 2008 and a gradual recovery. As a result, those who started SIP in January 2008 (when PE was 27.07) got a return of 13.97%. Those who started SIP in October 2008 (when PE was 9.29) got a return of 14.36%. Again, both got almost the same return.
In 2013, India was counted among the ‘Fragile Five’ countries, which led to a huge decline in the market. But in 2014, the election environment gave the market a boost again. As a result, those who started SIP in August 2013 got a return of 14.89%. Those who started SIP in August 2015 got a return of 15.26%. This again proves that regular investment matters more than time.
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