SIP-ping into stocks: A good idea?

Summary: Most investors are familiar with the idea of investing in mutual funds through SIPs. But when it comes to directly investing in stocks, do SIPs work? Or fumble? We find out. When you hear the word SIP (systematic investment plan), chances are you think of mutual funds. And for good reason. SIPs are one of the simplest ways to invest: put in a fixed amount regularly, tune out the market noise and let compounding work its magic. But can SIPs be applied to stock investing? The pitch sounds irresistible. If SIPs work for mutual funds, why not for your favourite companies? But here’s the real question: does it actually make sense to invest in stocks this way? Let’s break it down. Why stock SIPs sound tempting Think about it. With a stock SIP, you: Don’t have to stress over ‘timing the market’. Automatically build discipline since you buy shares every month without overthinking. On paper, it appears to be a neat hack. The comfort of SIPs, but with the thrill of owning your favourite stocks. When SIPs worked like magic Let us take the example of Rajesh, a young IT professional in Bengaluru in the mid-2000s. While he was no stock market expert, he had heard about the power of SIPs. And so every month, he began setting aside a small sum and bought shares of Infosys and HDFC Bank. At first, it didn’t feel special. In fact, during the 2008 c

This article was originally published on October 05, 2025.