Is SIP Really Better Than One-time Investment?

Many Financial Planners recommend Systematic Investment Plan (SIP) over other investment plans for equity investment. Some of the reasons they advice to invest in SIP are that

  1. A person with small saving every month can invest in equity.
  2. A retail investor need not time the market
  3. SIP can be linked to bank account and a person need not worry about making an investment
  4. SIP provides cushion for ups and downs of equity market.

However, when I compared SIP investment with one-time investment, there was a marked difference.SIP Profit vs One time Investment Profit

I took an example of Rs 1000 invested every month for 3 years in HDFC Top 200 and then calculating the return in SIP vs Rs 36000 invested one-time in HDFC Top 200 and then calculating the return after 3 years.SIP Investment, Profit, Profit Percent of HDFC Top 200One-time Investment, Profit, Profit Percent of HDFC Top 200


  1. SIP yielded a profit of more than 100% 32 times while One-time Investment yielded a profit of more than 100% 64 times. i.e. One-time Investment yielded a profit of 100+% twice the number of times SIP yielded a profit of 100+%
  2. The maximum profit earned by SIP in any year is 150% while the maximum profit earned by One-time investment is 489% (3 times more).
  3. SIP yielded a loss (less than 0% profit) 13 times while One-time Investment yielded a loss 11 times. Count-wise SIP was a loser but the difference is too low to count it a loser on this parameter.
  4. SIP recorded maximum loss of 26% while One-time Investment recorded maximum loss of 28%.Maximum losses also look comparable.

In this race, One-time Investment seems to be the winner over SIP investment.

Then I accumulated the returns given by SIP and One-time Investment over 12 months.1 Year accumulation of SIP and One-time Investment Profit of 36 months of HDFC Top 200

I noticed that SIP returns gave loss 3 times while One-time Investment gave loss 7 times. However, if you observe the graph of SIP returns and One-time Investment returns, one may say that it is probably too safe to invest in SIP than buying the units one-time. I would advice to adopt both SIP and One-time Investment, just as our investments should be – diversified.

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