SIP Calculator: A disciplined investment approach and gradually increasing SIP contributions every year may help investors build a significantly larger long-term wealth corpus than attempting to time market dips, according to financial experts speaking in a recent discussion on Zee Business.

The experts said that while “buying the dip” can marginally improve returns, the bigger advantage for most long-term investors comes from staying invested consistently and increasing SIP amounts over time through a “step-up SIP” strategy.

Mrin Agarwal, CEO, Finsafe, said investors should focus less on market timing and more on consistency and long-term investing discipline. “Long-term wealth creation depends on two things—discipline in investing and how long you stay invested,” she said.

Explaining the impact of a step-up SIP, Agarwal gave the example of an investor contributing Rs 25,000 monthly for 20 years at an assumed 12 per cent annual return.

According to her, a regular SIP in such a scenario could create a corpus of around Rs 2.3 crore. However, if the investor increases the SIP amount by 10 per cent every year, the final corpus could rise to nearly Rs 4.65 crore—almost double the amount.

Agarwal clarified that the significantly larger corpus comes primarily from steadily increasing the investment amount over time, while the rate of return remains broadly similar.

She said step-up SIPs may be a more practical long-term wealth-building strategy for most investors because they align investments with rising income levels over time.

The discussion also explored whether investing extra money during market corrections—often called “buying the dip”—meaningfully improves returns.

Agarwal referred to a back-tested study based on data from 2000 to March 2026, where investors compared regular SIP investing with strategies that deployed additional money during market declines.

According to the findings she shared:

• A regular SIP strategy generated an Extended Internal Rate of Return (XIRR) of roughly 13.46 per cent
• Investing only after market falls of 10–20 per cent delivered around 13.6 per cent

She noted that the difference between the two approaches was relatively small.

Agarwal suggested that a combination approach may work best—continuing regular SIPs while deploying additional money during sharp corrections when liquidity is available.

Mohit Gang, CEO, Moneyfront, explained that the advantage of dip investing tends to narrow over longer investment horizons.

According to him, over shorter periods such as three to 10 years, investors may see 1.5–2 per cent better CAGR returns by investing extra during market dips. However, over 20–25 years, the difference between regular SIP investing and dip-based investing largely disappears.

“As the investment horizon becomes longer, the data normalises,” Gang said, adding that behavioural mistakes and delayed deployment of cash often offset the gains from trying to time corrections.

He also warned about the “cash drag” problem, where investors hold idle cash waiting for a correction, only to see markets continue rising.

Both experts highlighted that buying during sharp market declines is psychologically difficult for most retail investors.

Agarwal said many investors hesitate to deploy money during crashes because they fear markets may fall further. She cited the 2020 market crash as an example where many investors stayed on the sidelines expecting deeper corrections, only to miss the eventual recovery.

She added that dip-based investing is more of a tactical strategy and may require guidance from a financial advisor.

Gang compared SIP investing to building an innings in Test cricket, where regular singles and doubles matter more than waiting only for loose deliveries.

He said investors should continue their core SIPs consistently and use market corrections opportunistically if surplus liquidity is available through bonuses, salary hikes, or other windfalls.

The experts agreed that for most long-term investors, staying disciplined with regular SIPs and gradually increasing contributions every year remains one of the most practical and effective approaches to long-term wealth creation.