POSTED BY March 14, 2013 4:41 pm COMMENTS (26)ON
I have been investing in Equity Mutual Funds via SIP route as suggested by lot of people and recommended in this forum as well. My SIP is Rs.5,000 a month which is fixed for 10th / 11th day of every month. I have been paying the SIPs for nearly 2 years now and woudl continue to do so.
One of my friend who is very active in investments, has been investing almost the same amount but not via SIP, he keeps on buying units the day he feels market is slightly down. This way sometime he invest 3000 (1000 x 3 times in a month) a month and sometimes 8-10000 (8 or 10 x 1000 in a month) a month. This way he has invetsed almost the same amount but has slightly better returns than those of mine (say a difference of about 2-2.5%).
Of course he has to keep a track of market on daily basis and I dont have to put my time and mind in this.
But then I would like to know, is his apprach better than the SIPs as practically he is getting better returs than the theoratically correct SIP approach?