SIP only in month end

I was reading an article in ET about how it is beneficial to go for choosing dates in SIP at the fag end of the month. The idea is that historical data reveals that NAV is always lower during the month end. So if your SIP is timed such that you buy units at the end of the month, you will get the units at lower NAVs compared to other days. The suggestion is to time the buying of units between 23rd to 2nd of next month. This has been corroborated by the following data and the saving can be as high as 3.5%.

I find this advice a bit counter-intutive. If you closely look the % saving is continuously reducing from year 2000 and there is as such no clearcut pattern. Also a retail investor chooses SIP primarily to enforce a disciplined saving. The risk-takers usually don't go SIP route and also those who have lump-sum amount to invest. SIP is particularly popular amongst the salaried people. Now if someone choose the SIP investment date at the fag end, it would most likely be a time when the salaries have been splurged away with all the purchases and expenses. This might lead to another problem of cheque bounce or direct-debt insufficient cash situation. The best time is to make it as soon as your salaries come, this way the money is already gone into saving.

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