A new report has revealed that investors who begin their Systematic Investment Plans (SIPs) at market peaks may accumulate more wealth over time than those who wait for a market downturn. This finding challenges the widely held belief that investing at market lows yields better financial gains.
The report, published by ValueMetrics, analyzed historical data of the Nifty Smallcap 250 Index over the past 20 years. It focused on periods when the index declined by more than 15%, comparing two types of investors—one who starts SIPs at market peaks and another who waits for a downturn before investing.
Surprising Results in Wealth Accumulation
The analysis found that investors who started SIPs at market peaks often accumulated more absolute wealth in the long run. In contrast, those who waited for the market bottom had slightly higher percentage returns but ended up with lower total wealth.
For example, an investor who started a monthly SIP of ₹10,000 in January 2008, just before a 76% market crash, would have invested ₹20.7 lakh by March 2025 and accumulated ₹91.5 lakh at an extended internal rate of return (XIRR) of 15.6%.
In comparison, an investor who waited for the market to bottom out in March 2009 before starting investments would have invested ₹19.2 lakh and ended up with ₹78.3 lakh, despite having a slightly higher XIRR of 15.9%.
SIPs Remain a Strong Investment Choice
The findings highlight that waiting for the “perfect” market entry point can result in lost opportunities, while consistent investing, even during market peaks, can build significant wealth over time.
The report comes at a time when SIP investments are seeing a strong surge in India. According to the Association of Mutual Funds in India (AMFI), SIP contributions in FY 2024-25 (April-February) reached ₹2,63,426 crore, reflecting growing investor confidence in systematic investment strategies.
As market fluctuations continue, experts suggest that staying committed to SIPs, regardless of market conditions, can be a more effective wealth-building approach than trying to time the market.
