Key idea
The quiet advantage of investing regularly: when prices fall, your fixed amount buys more units. Over time, this smooths your average cost.
Rupee-cost averaging is the mechanism that makes a SIP powerful. Because you invest a fixed amount each month, you automatically buy more units when prices are low and fewer when prices are high. The result is a lower average cost than trying to time the market.
Four months of a ₹5,000 SIP
| Month | Price / unit | Units bought |
|---|---|---|
| 1 | ₹100 | 50 |
| 2 | ₹80 | 62.5 |
| 3 | ₹125 | 40 |
| 4 | ₹100 | 50 |
Across these four months you invested ₹20,000 and bought 202.5 units, an average cost of about ₹98.8 per unit, below the simple average price of ₹101.25. The fixed amount did the work: it forced you to buy more when the price dipped to ₹80, and less when it jumped to ₹125.
Why it matters emotionally
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Marking this complete counts today, and your streak becomes day 1.