SIP vs Buying the dip - Plan

This weekend I am planning to check if following a Systematic investment plan or buying the dip is better for Indian investors. @theBuoyantMan already shared similar data on Twitter once, but I just want to check how it performs for Nifty50 TRI along with maintaining deployable cash in a savings account.

To check the performance of both systems, I will be using the Nifty50 Total returns index and saving rates data for the last 15 years from the RBI website.

SIP:

1. Daily SIP: Buy ₹1000 worth of units based on Nifty50 TRI value

2. Weekly SIP: Buy ₹5000 worth of units based on Nifty50 TRI value at end of the week.

BTFD:

1. Buy when Nifty50 TRI is 1% down as compared to the previous day's value.

2. Buy when Nifty50 TRI is 5% down as compared to the previous week's value.

In case of buying the dip option, if Nifty50 TRI is not down 1%, we will add that daily ₹1000 into a savings account. If Nifty50 TRI is down 1%, we will use 10% from whatever money accumulated in the account. Similarly, for the weekly option, we will keep adding ₹5000 to the savings account and use only 10% of the balance when we get the chance to invest.

Finally, we will compare XIRR values for both the options for different time frames. (up to 15 years)

Let me know if you want to test any more scenarios.