Rate Journey
The SIP Instalment You Bought at the Worst Possible Time — and Why It Still Worked Out
The example below is illustrative — a constructed scenario built to explain the mechanism, not a real investor's actual data.
Somewhere on almost every long-running SIP's Rate Journey chart is one instalment that landed on what felt, at the time, like the worst possible day — right before a sharp fall, buying in at a price that looked painfully expensive within days. Here's why that single instalment usually mattered far less than it felt like it did in the moment.
Picture a SIP instalment of ₹10,000, allotted at a NAV of ₹150 — and then, over the following month, the fund falls 20%, down to a NAV of ₹120. On the chart, that instalment's dot sits right at the peak, just before the drop. In isolation, it looks like the single worst-timed purchase possible: fewer units than the instalments that followed, bought at the highest price on the entire chart.
That one instalment doesn't get judged in isolation — it sits inside a SIP that keeps running. The very next instalment, at the same ₹10,000, now buys units at ₹120 instead of ₹150 — 25% more units for the identical rupee amount, purely because the price fell. Instalments after that, if the fund keeps recovering, buy progressively fewer units again as the NAV climbs back. Averaged across the whole sequence, one badly-timed instalment gets diluted by every instalment around it — its damage isn't erased, but it's absorbed into a much larger pattern that a single dot on a chart can never show on its own.
It's the SIP's overall XIRR — the blended, time-weighted return across every instalment combined, cheap ones and expensive ones together. A single mistimed purchase moves that number by a small amount. A SIP that gets stopped out of fear right after that scary fall — abandoning the instalments that would have bought units cheap during the recovery — moves that number by a great deal more. The dot that looks worst on the chart is rarely the one that actually hurt the outcome. The gap in the chart where instalments stopped happening at all is.
Nobody can consistently avoid buying at short-term local peaks — not professional fund managers, and certainly not an automated SIP running on a fixed monthly date. The entire design of a SIP assumes some instalments will land badly, on purpose, because the alternative — trying to time every single purchase — has a long, poor track record for almost everyone who's tried it. One bad dot on a Rate Journey chart isn't a failure of the plan. It's the plan working exactly as designed, doing its job precisely on the days it looks worst.
Atin Kumar Agrawal, Abundance Financial Services (ARN-251838), is an AMFI Registered Mutual Funds & SIF Distributor. See your own Rate Journey, including the instalments that felt worst at the time, on the portfolio dashboard — or book a free consultation if a specific fall has you reconsidering your SIP.