# What is the best date to start a mutual fund SIP? Results from 4000+ 10 Year SIP Returns!

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.

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.

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