Which is the Best day for SIP in Mutual Fund?

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Best day for SIP in Mutual Funds

Best day for SIP in Mutual Funds

Our fancy for higher returns never ends! A very common question that is often asked by new Mutual Fund Investors is “Which date should I choose for SIP in Mutual Fund”? The thought behind being Can I generate extra return by timing my SIP! 

If you think SIP or Systematic Investment Plan was designed to get rid of the “Market timing Psyche” and invest regularly. But then it does not hurt if we get little extra by choosing the right date. In this post we answer if there is “Best Day” for SIP Investment and if yes Which Date?

Best Day for SIP in Mutual Funds Analysis:

I did this analysis a few years back and hence the data is bit dated, but the concept still holds true!

For my analysis I choose the closing point of NIFTY for the period of 1st January 2000 – 31st December 2009 (ten year period). Here I assumed that I could buy 1 unit of NIFTY by paying amount equal to its value, for e.g. As on 31st December 2009 the value of NIFTY was 5201.05, so I assumed that I could buy 1 unit of NIFTY by paying Rs. 5201.05.

The second thing is I calculated how much units of NIFTY I can buy monthly with a SIP of Rs 10,000 every month.

Also Read: Why Investing in Mutual Fund NFOs is Bad Idea?

All my calculations are based the way real SIP happens, i.e. if the market is closed on the SIP date then that investment is done on next business day. For e.g. If you do SIP on 1st of every month & market is closed on 1st your SIP would happen on next day when markets open which may be 2nd, 3rd, 4th or 5th.

Best day for SIP in my analysis means the day when you could buy the maximum number of units while worst day is just the opposite.

Calculation Sheet for every Year:

The table below shows the total NIFTY units I could buy in respective years if I did a SIP on the respective date. At the end of table I have mentioned the day which was best & worst for SIP. The last row has the percentage gain you would have made had you invested on best day over worst day.

SIP Date 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
1 85.2 107.5 114.8 102.5 69.1 53.9 36.3 27.3 28.3 31.6
2 84.7 107.8 114.8 102.1 68.6 53.8 36.1 27.2 28.2 31.4
3 84.8 108.1 114.9 102 68.7 53.5 36.1 27.3 28.3 31.3
4 84.5 107.8 114.5 101.7 68.3 53.4 36 27.3 28.3 31.3
5 84.2 107.4 114.2 101.7 68 53.6 35.9 27.3 28.4 31.4
6 84.2 107.5 113.8 101.5 67.9 53.8 36 27.2 28.5 31.4
7 83.7 107.9 113.7 101.6 67.7 53.7 36.2 27.2 28.6 31.4
8 82.8 107.5 113.5 101.7 67.8 53.7 36.4 27.2 28.5 31.6
9 82.6 107.5 113.6 101.6 67.8 53.7 36.2 27.2 28.5 31.6
10 83.4 107.7 113.6 102 67.9 53.5 36.3 27.3 28.6 31.6
11 84.4 108.1 113.3 102 68.4 53.5 36.4 27.2 28.7 31.5
12 84.3 108.6 113.1 102.1 68.6 53.6 36.4 27.1 28.8 31.5
13 84.8 109.2 113.2 102.2 68.5 53.4 36.6 26.9 29 31.3
14 85 109.3 113.2 102.4 69 53.7 36.5 26.8 28.8 31.1
15 85.2 109.6 112.9 101.8 69.8 53.6 36.3 26.9 29.2 31.2
16 85.5 109.6 113.1 101.2 69.8 53.6 36.1 26.9 29.2 30.7
17 85.5 109.1 112.9 101.4 69.5 53.6 36.1 27 29.4 30.8
18 86 108.7 113.3 101.6 69.3 53.6 36.2 26.9 29.4 30.7
19 86.1 108.2 114 101.7 69.1 53.8 36.4 26.8 29.5 30.7
20 86.3 108.6 114.2 101.4 69.6 53.8 36.4 26.8 29.7 30.9
21 87 109 114.4 101.5 69.7 53.7 36.3 26.8 29.5 30.9
22 88 109 114.4 101.5 69.6 53.8 36.2 26.6 29.8 30.9
23 88.5 109.3 114.5 102 69.5 53.9 36 26.6 29.8 30.7
24 88.2 109.2 114.3 101.4 69.2 53.8 36 26.6 30.5 30.5
25 87.9 109.5 114.7 101.3 69.2 53.5 35.8 26.4 30.5 30.4
26 87.6 109.3 115 100.7 68.8 53.3 35.7 26.3 30.4 30.3
27 87.1 109.6 115.2 100.5 68.8 53.3 35.5 26.5 30.6 30.3
28 87.1 108.5 115.7 100.1 69 53.3 35.6 26.6 30.3 30.5
Best SIP Day 23 27 28 1 16 23 13 10 27 9
Worst SIP Day 9 5 15 28 7 28 27 26 2 27
# Units Purchased on Best Day 88.5 109.6 115.7 102.5 69.8 53.9 36.6 27.3 30.6 31.6
# Units Purchased on Worst Day 82.6 107.4 112.9 100.1 67.7 53.3 35.5 26.3 28.2 30.3
% Gain (Best Over Worst Day) 7.10% 2.00% 2.50% 2.40% 3.10% 1.20% 2.80% 3.70% 8.30% 4.40%

Best Days for SIP: 23, 27

Worst Days for SIP: 27, 28

Its amazing to see 27th occur as best day twice and also worst day twice in the period of 10 years. This proves to an extent that timing the Market by choosing SIP dates is a futile exercise.

Also Read: How are Equity and Debt Mutual Funds Taxed?

Calculation Sheet for every 3 Years

Now usually we don’t do SIP for 1 year, we should do SIP for a minimum of 3 years. So I did the same thing as above for the 3 year period. Here you can see the percentage gain you would have made had you invested on best day over worst day reduces.

SIP Date 2000 – 02 2001 – 03 2002 – 04 2003 – 05 2004 – 06 2005 – 07 2006 – 08 2007 – 09
Best SIP Day 23 23 1 1 20 1 24 24
Worst SIP Day 9 9 8 28 5 26 2 14
# Units Purchased on Best Day 312.3 325.8 286.3 225.5 159.9 117.5 93 87.5
# Units Purchased on Worst Day 303.7 322.7 283 222.3 157.6 115.3 91.5 86.7
% Gain (Best Over Worst Day) 2.80% 1.00% 1.20% 1.40% 1.50% 1.90% 1.70% 0.90%

Best Days for SIP: 1, 23, 24

Worst Days for SIP: 9

Also Read: Should you invest in Child Plan Mutual Funds?

Calculation Sheet for every 5 Years and 10 Year

Well some people do it for 5 years, so I do the same thing for a period of 5 year. The last column shows the same thing for the entire analysis period of 10 Years.

SIP Date 2000 – 04 2001 – 05 2002 – 06 2003 – 07 2004 – 08 2005 – 09 2000 – 09
Best SIP Day 23 23 1 1 20 20 23
Worst SIP Day 9 9 6 28 5 26 9
# Units Purchased on Best Day 483.8 449.2 376.6 289.1 216.4 177.7 660.9
# Units Purchased on Worst Day 473 444.1 372.9 284.5 213.2 176 650.2
% Gain (Best Over Worst Day) 2.30% 1.20% 1.00% 1.60% 1.50% 1.00% 1.60%

Best Days for SIP: 1, 23, 20

Worst Days for SIP: 9

Also Read: Arbitrage Mutual Funds – A good Short Term investment option

So finally the question – what are best days for SIP?

Based on overall analysis, if I look at 3 year running SIP, 1st, 23rd & 24th seems to be the best days while 9th seems to be worst.

The days are almost similar for 5 year period too.

But your gains had you chosen the best day over worst varies from 0.9% to 2.8% in 3 year period & 1% – 2.3% for 5 year period. And these gains are overall gains which if seen on annualized basis is not even 1%.

So if you are looking for SIP in a Mutual Fund for a long period of time say 5 years the selection of day hardly matters. Do it on the days most convenient to you. For e.g. for a Salaried person his SIP day may be close to day he gets his salary.

Also most investors don’t have just one SIP running. You may have 3-5 different Mutual Funds where you invest the SIP way. You may want to spread out the investment for the entire month rather than concentrating them on a single day until you have some special convenience or requirement for doing so.

Also Read: Best ELSS (Tax Saving Mutual Fund) to Invest in 2017

To conclude:

As we have seen a single day can be best for SIP in one year while it could turn to be worst the very next year. The other thing is 9th appears to be worst if we see cumulative return in 3 years, 5 years & 10 years basis but for individual year analysis it is worst just once in year 2000. All the above proves that the “BEST SIP Date” is just a random event and there’s nothing called “Best or Worst Day for Investment or SIP“.

I would advise investors to get out of the Market Timing mentality and start investing in Mutual Funds by using SIP (Systematic Investment Plan) for serious long term wealth creation.

Readers let me know what your SIP dates are and did you decide them because you wanted to time the market via SIP or just for your convenience?

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17 thoughts on “Which is the Best day for SIP in Mutual Fund?

  1. Nice exercise. I have been looking for such one. Finally, to spread market risk in SIP as well, I selected 4-5 funds and for each fund, I selected 3 different dates which covers 12-15 days of market out of 20 days. As such, the investment would mostly be average out and I think it will benefit in the long run. What do you think Amit?

  2. Raj Kumar Daga says:

    Useless exercise.
    Wastage of time

  3. Nice Analysis Amit.. I have starting following your blog recently .. and I am quite happy about it.. your articles are apt in detail with perfect consistency..

  4. Hi Amit,

    My investment date are 5,10,20 and 25 and investing in four fund 16500k.
    axis long term (elss) 6500k
    UTI Mid cap 2500k
    SBI Blue chip 2500k
    Franklin prima plus 5000k

    Can you please review the above plan ?

    Thanks,

  5. Nandan Banerjee says:

    Thanks for sharing such a good analysis. I have a question. Should we go with Direct Plan or Regular Plan mutual funds ?

    • If you can select the right funds and are ready do do some legwork for KYC and first time account creation, go for DIRECT. You can gain approximately 1% return every year.

  6. Hi Amit, I think this analysis can be taken one step further to actually come up with the “best possible” date for SIP , of course with strings attached.
    To come up with the best possible date you may not only consider the best and the worst performers. If a date has performed better than other dates over a period then that’s the best date. I did an analysis for 23rd as a date for SBI Nifty Fund over the 5 yr period and it consistently beats the date 1 for almost all years. Sometimes by .5% or more and sometimes by 01%. If that’s the case 23rd can be a better date than 1st.
    I did this kind of analysis some time back too for various funds that I hold and I consistently got the dates between 25th to 30th as better days than from 1st to 5th.
    Although I agree all this is mathematical but that’s what statistics is all about. The very idea of doing a SIP is to distribute risk and return, by doing this analysis we’re swaying away from it – I see no harm if we carefully choose a date rather than randomly doing it.

    • Vijay – I agree with your analysis that there might be some days which consistently outperform. But as you said the entire idea of SIP to make investment simple and consistent. And yes some days might be better for some funds while other days might be better for other funds.

      Even I had seen some analysis earlier (though don’t remember where) which supports your analysis that last few days in month are better than first few days – may be due to settlement of F&O segment on last Thursday of the month (but don’t know why :)).

      Thanks for sharing your thoughts

  7. Dear Amit,

    I have a question. How to calculate inflation rate for a year based on Consumer price index?

  8. Nice analysis.Agree with you that one cannot time the market. One way of further diversifying and benefiting from the rupee cost averaging concept is to have 3 SIPs a month instead of one, if the amount of SIP is sizeable enough.i.e at least Rs 5000 a month,on three different dates, i.e one on 1st, one on 10th, and one on the 20th or 21st.

  9. I am new to mutual fund investment and while looking at the SIP form I was just wondering which date to SIP. Hmm.. now I have chosen the next day of my salary for SIP.

    • Oh good you started with your SIP investment in Mutual Fund. I believe this is the best investment option for a newbiee investor. Are you investing directly or through brokers?

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