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Reader’s question: Is investing lumpsum on dips 12 times or more in a year the same as doing a monthly SIP? What are the merits of both styles of investing? - Sumant Bhatia
Investing lumpsum amounts on market dips multiple times a year does share a surface similarity with an SIP. Both spread your money across different price levels over time. But that is roughly where the comparison ends.
The real difference is not the frequency of investment. It is control. An SIP takes the decision out of your hands. A fixed amount goes in every month, regardless of whether the market is up, down or sideways. Buying on dips asks you to watch prices, judge when a fall is deep enough and then pull the trigger. That sounds straightforward but rarely is.
Markets do not telegraph their lows. What looks like a 5 per cent dip today can become a 20 per cent correction by next month. Waiting for the right entry point often means sitting on idle cash, and idle cash has a cost.
Imagine you had a crystal ball. Every month, for 30 years, you knew exactly when the market would hit its lowest point and bought right there. How much better off would you be than someone who just invested on the same date every month without a second thought?
About 0.2 percentage points a year.
And the investor who consistently bought at each month's highest point every single time for three decades lagged the regular investor by just 0.3 percentage points annually.
The gap between perfect timing and no timing at all is smaller than almost anyone expects. Which means the effort of watching markets, waiting for dips and judging the right moment to act is buying you almost nothing that a simple monthly SIP would not.
Staying invested over time matters far more than finding the perfect entry point.
Buying on dips works beautifully in models. Reality is messier. Markets fall and then keep falling. The dip you bought becomes a bigger dip a month later. Most investors freeze, wait for more certainty and end up sitting on idle cash longer than they planned. SIPs remove that problem entirely.
Also read: Your idle Rs 1 lakh deserves better than a savings account
This article was originally published on June 24, 2026.
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