Last Updated on December 29, 2021 at 11:54 am
One of the common newbie questions regarding mutual fund SIPs is: What is the best date to start a mutual fund SIP? Nothing wrong with the question, but as in most cases, the answers are often wrong. In this post, I discuss the data of 4147 10-year Sensex SIP retuns computed between Jan 1991 and Sep 2008 to find out if there is a “best date” for starting a SIP.
Anyone who has stared at market graphs long enough will tell you that is not possible to find such patterns in the stock market. That is fine one day that will offer better returns. If this is possible, the entire math associated with the markets will have to be re-written. It is one thing to talk about this and another to show proof. That is what I would like to do in this post.
To be frank, I have better things to do with my time, but as they say there is a sucker born every minute to read the biased analysis of a short-sighted analyst (also born every minute). Therefore it becomes necessary to dig deep and publish results that are not of any personal use.
How to find the best date to start a mutual fund SIP (if there is one)
1: Get Sensex data. I have used data from Jan 1991.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! 🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
2: Choose a 10-year SIP period (reasonably long enough and something that most investors do not do)
3: Run a 10Y SIP starting on 1st July1991. The return is 10.903% (the reason for excessive decimals should be obvious below). Then shift the 10Y SIP by a day. So the next SIP starts on 2nd July 1991 and so on.
4: So the first 1st SIP date = 1st, 2nd SIP date = 2nd, 3rd SIP date = 3rd and so on. We get 21 SIP dates in July 1991 and the returns are plotted below.
Please look at the difference in returns in the x-axis. Any investor with half a brain will see this graph and recognise that there is no such thing as “best date for SIP” and move on to other things like for example yesterdays post: How to select suitable debt mutual funds with low credit risk? You are more than welcome to read on as an analyst
As an analyst, we should not get satisfied so easily. We need to repeat the above excercise for Aug 1991, Sep 1991, ….. When this is done, we end up 207 months of such data and a total of 4147 10-year SIP returns.
Result: Is there a best date to start a SIP?
The difference between the max SIP return and the minimum SIP return for each of those 207 months is shown below.
This enough proof that you get no great advantage in picking and choosing a SIP for better returns. That is simply not possible. The difference is simply too small. Each month has about 18-20 trading days. Aside from the max and min, there will still be about 16-17 other returns possible. Stop searching for the best SIP date!! IT DOES NOT EXIST!
Here is the full table of results.
Month & Year | Difference between max and min return | Max return SIP date falls after 15th of the month(1 = yes and 0 = No) | Min Return SIP date falls before 15th of the month (1 = yes and 0 = No) |
7-1991 | 0.08037% | 1 | 0 |
8-1991 | 0.09169% | 1 | 0 |
9-1991 | 0.09773% | 1 | 0 |
10-1991 | 0.08271% | 1 | 1 |
11-1991 | 0.08853% | 1 | 1 |
12-1991 | 0.05274% | 1 | 1 |
1-1992 | 0.14514% | 1 | 1 |
2-1992 | 0.11094% | 1 | 0 |
3-1992 | 0.18654% | 1 | 1 |
4-1992 | 0.12744% | 1 | 1 |
5-1992 | 0.12460% | 1 | 0 |
6-1992 | 0.09663% | 1 | 1 |
7-1992 | 0.16426% | 1 | 0 |
8-1992 | 0.13410% | 1 | 1 |
9-1992 | 0.15496% | 1 | 1 |
10-1992 | 0.16333% | 1 | 1 |
11-1992 | 0.17218% | 1 | 1 |
12-1992 | 0.08953% | 1 | 1 |
1-1993 | 0.15068% | 1 | 1 |
2-1993 | 0.14397% | 1 | 1 |
3-1993 | 0.18767% | 1 | 1 |
4-1993 | 0.15008% | 1 | 1 |
5-1993 | 0.20870% | 1 | 1 |
6-1993 | 0.15090% | 1 | 1 |
7-1993 | 0.15570% | 1 | 1 |
8-1993 | 0.16278% | 1 | 1 |
9-1993 | 0.17066% | 1 | 1 |
10-1993 | 0.15706% | 1 | 1 |
11-1993 | 0.14010% | 1 | 1 |
12-1993 | 0.12329% | 1 | 1 |
1-1994 | 0.11151% | 1 | 1 |
2-1994 | 0.12733% | 1 | 1 |
3-1994 | 0.13261% | 1 | 1 |
4-1994 | 0.13514% | 1 | 1 |
5-1994 | 0.13708% | 1 | 1 |
6-1994 | 0.14076% | 1 | 1 |
7-1994 | 0.14834% | 1 | 1 |
8-1994 | 0.14958% | 1 | 1 |
9-1994 | 0.15643% | 1 | 1 |
10-1994 | 0.14905% | 1 | 1 |
11-1994 | 0.17917% | 1 | 1 |
12-1994 | 0.11583% | 1 | 1 |
1-1995 | 0.16133% | 1 | 1 |
2-1995 | 0.12765% | 1 | 1 |
3-1995 | 0.15949% | 1 | 1 |
4-1995 | 0.11917% | 1 | 1 |
5-1995 | 0.17473% | 1 | 1 |
6-1995 | 0.14187% | 1 | 1 |
7-1995 | 0.18834% | 1 | 1 |
8-1995 | 0.25278% | 1 | 1 |
9-1995 | 0.13847% | 1 | 1 |
10-1995 | 0.27561% | 1 | 1 |
11-1995 | 0.16627% | 1 | 1 |
12-1995 | 0.08877% | 1 | 1 |
1-1996 | 0.28993% | 1 | 1 |
2-1996 | 0.11374% | 1 | 1 |
3-1996 | 0.10873% | 1 | 1 |
4-1996 | 0.10749% | 1 | 1 |
5-1996 | 0.23690% | 1 | 1 |
6-1996 | 0.12132% | 1 | 1 |
7-1996 | 0.26041% | 1 | 1 |
8-1996 | 0.11534% | 1 | 1 |
9-1996 | 0.11961% | 1 | 1 |
10-1996 | 0.24104% | 1 | 1 |
11-1996 | 0.12305% | 1 | 1 |
12-1996 | 0.11350% | 1 | 1 |
1-1997 | 0.26106% | 1 | 1 |
2-1997 | 0.11324% | 1 | 1 |
3-1997 | 0.26425% | 1 | 1 |
4-1997 | 0.13272% | 1 | 1 |
5-1997 | 0.13691% | 1 | 1 |
6-1997 | 0.13814% | 1 | 1 |
7-1997 | 0.24036% | 1 | 1 |
8-1997 | 0.14314% | 1 | 1 |
9-1997 | 0.14016% | 1 | 1 |
10-1997 | 0.16435% | 1 | 1 |
11-1997 | 0.12556% | 1 | 1 |
12-1997 | 0.14084% | 1 | 1 |
1-1998 | 0.14240% | 1 | 1 |
2-1998 | 0.12950% | 1 | 1 |
3-1998 | 0.13320% | 1 | 1 |
4-1998 | 0.13569% | 1 | 1 |
5-1998 | 0.12070% | 1 | 1 |
6-1998 | 0.13955% | 1 | 1 |
7-1998 | 0.13057% | 1 | 1 |
8-1998 | 0.11000% | 1 | 1 |
9-1998 | 0.12879% | 1 | 1 |
10-1998 | 0.13368% | 1 | 1 |
11-1998 | 0.13271% | 1 | 1 |
12-1998 | 0.13758% | 1 | 1 |
1-1999 | 0.14003% | 1 | 1 |
2-1999 | 0.14192% | 1 | 1 |
3-1999 | 0.14783% | 1 | 1 |
4-1999 | 0.14411% | 1 | 1 |
5-1999 | 0.12863% | 1 | 1 |
6-1999 | 0.14514% | 1 | 1 |
7-1999 | 0.15053% | 1 | 1 |
8-1999 | 0.15511% | 1 | 1 |
9-1999 | 0.15741% | 1 | 1 |
10-1999 | 0.14268% | 1 | 1 |
11-1999 | 0.14511% | 1 | 1 |
12-1999 | 0.15846% | 1 | 1 |
1-2000 | 0.13928% | 1 | 1 |
2-2000 | 0.16414% | 1 | 1 |
3-2000 | 0.16549% | 1 | 1 |
4-2000 | 0.14334% | 1 | 1 |
5-2000 | 0.15226% | 1 | 1 |
6-2000 | 0.14147% | 1 | 1 |
7-2000 | 0.13103% | 1 | 1 |
8-2000 | 0.13165% | 1 | 0 |
9-2000 | 0.12790% | 1 | 1 |
10-2000 | 0.12875% | 1 | 1 |
11-2000 | 0.13831% | 1 | 0 |
12-2000 | 0.12915% | 1 | 0 |
1-2001 | 0.13613% | 1 | 0 |
2-2001 | 0.11795% | 1 | 1 |
3-2001 | 0.14081% | 1 | 0 |
4-2001 | 0.10123% | 1 | 1 |
5-2001 | 0.15207% | 1 | 0 |
6-2001 | 0.14955% | 1 | 0 |
7-2001 | 0.10792% | 1 | 1 |
8-2001 | 0.17123% | 1 | 0 |
9-2001 | 0.10418% | 1 | 1 |
10-2001 | 0.12407% | 1 | 0 |
11-2001 | 0.13159% | 1 | 0 |
12-2001 | 0.09919% | 1 | 1 |
1-2002 | 0.15027% | 1 | 0 |
2-2002 | 0.09358% | 1 | 1 |
3-2002 | 0.10311% | 1 | 1 |
4-2002 | 0.14887% | 1 | 1 |
5-2002 | 0.13094% | 1 | 0 |
6-2002 | 0.08497% | 1 | 1 |
7-2002 | 0.15661% | 1 | 1 |
8-2002 | 0.10678% | 1 | 1 |
9-2002 | 0.09655% | 1 | 1 |
10-2002 | 0.10505% | 1 | 0 |
11-2002 | 0.12020% | 0 | 0 |
12-2002 | 0.13647% | 1 | 0 |
1-2003 | 0.25558% | 1 | 0 |
2-2003 | 0.09413% | 1 | 1 |
3-2003 | 0.32439% | 1 | 0 |
4-2003 | 0.11832% | 1 | 0 |
5-2003 | 0.12844% | 1 | 0 |
6-2003 | 0.09584% | 1 | 1 |
7-2003 | 0.16665% | 1 | 0 |
8-2003 | 0.14635% | 1 | 0 |
9-2003 | 0.15476% | 1 | 0 |
10-2003 | 0.15582% | 1 | 0 |
11-2003 | 0.12438% | 1 | 1 |
12-2003 | 0.15666% | 1 | 0 |
1-2004 | 0.12228% | 1 | 1 |
2-2004 | 0.12391% | 1 | 1 |
3-2004 | 0.12295% | 1 | 1 |
4-2004 | 0.10153% | 0 | 1 |
5-2004 | 0.15283% | 0 | 0 |
6-2004 | 0.10580% | 0 | 0 |
7-2004 | 0.13482% | 0 | 0 |
8-2004 | 0.16712% | 0 | 0 |
9-2004 | 0.19417% | 0 | 0 |
10-2004 | 0.13519% | 0 | 0 |
11-2004 | 0.15523% | 0 | 0 |
12-2004 | 0.16452% | 0 | 0 |
1-2005 | 0.09940% | 0 | 1 |
2-2005 | 0.08207% | 0 | 0 |
3-2005 | 0.13771% | 0 | 0 |
4-2005 | 0.10258% | 0 | 0 |
5-2005 | 0.10544% | 0 | 0 |
6-2005 | 0.12713% | 0 | 0 |
7-2005 | 0.13791% | 0 | 0 |
8-2005 | 0.14505% | 0 | 0 |
9-2005 | 0.15580% | 0 | 0 |
10-2005 | 0.12766% | 0 | 0 |
11-2005 | 0.17107% | 0 | 0 |
12-2005 | 0.16451% | 0 | 0 |
1-2006 | 0.16785% | 0 | 0 |
2-2006 | 0.12000% | 0 | 1 |
3-2006 | 0.17878% | 0 | 0 |
4-2006 | 0.16213% | 0 | 0 |
5-2006 | 0.19059% | 0 | 0 |
6-2006 | 0.19137% | 0 | 0 |
7-2006 | 0.20405% | 0 | 0 |
8-2006 | 0.22434% | 0 | 0 |
9-2006 | 0.17029% | 0 | 0 |
10-2006 | 0.22778% | 1 | 0 |
11-2006 | 0.20702% | 0 | 0 |
12-2006 | 0.15665% | 1 | 0 |
1-2007 | 0.29218% | 0 | 0 |
2-2007 | 0.14738% | 1 | 1 |
3-2007 | 0.23303% | 1 | 0 |
4-2007 | 0.24837% | 0 | 0 |
5-2007 | 0.32203% | 0 | 0 |
6-2007 | 0.19792% | 0 | 0 |
7-2007 | 0.32055% | 0 | 0 |
8-2007 | 0.28131% | 0 | 0 |
9-2007 | 0.19391% | 0 | 1 |
10-2007 | 0.32055% | 0 | 0 |
11-2007 | 0.28641% | 1 | 0 |
12-2007 | 0.23394% | 0 | 0 |
1-2008 | 0.24541% | 0 | 0 |
2-2008 | 0.23091% | 0 | 0 |
3-2008 | 0.20584% | 0 | 1 |
4-2008 | 0.29300% | 0 | 0 |
5-2008 | 0.26795% | 1 | 0 |
6-2008 | 0.26763% | 0 | 0 |
7-2008 | 0.27684% | 0 | 0 |
8-2008 | 0.25144% | 0 | 0 |
9-2008 | 0.31225% | 0 | 0 |
There are some interesting insighte regarding WHEN the max SIP return and min SIP return occurs.
The min SIP return occured before the 15th of the month ~ 63% of the 207 months. The max SIP return occured after 15th ~ 76%. HOWEVER, after April 2004, the min occured before 15th and max after 15th only ~ 11% of the 54 months studied.
Conclusion
So don’t go about assuming there is a pattern when there is none! There is no best date for starting a SIP. In fact, as explained here: MF FAQ: part 1 and here: MF FAQ: part 2 there is no need for you to start a SIP and I recommend that you don’t. Just invest as much as possible whenever you get money (each month for many) directly by making a manual transaction at the AMC site.
Do not waste time on such trivial matters. If you want to become rich, you should first think like a rich person and not worry about peanuts.
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! You can watch podcast episodes on the OfSpin Media Friends YouTube Channel. 🔥Now Watch Let's Get Rich With Pattu தமிழில் (in Tamil)! 🔥
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter using the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
About The Author
Dr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu Gets a Superpower!” is now available! Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.
Your Ultimate Guide to Travel
This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)