Friday, May 17, 2019

How much SIP in Nifty50 would return?



If we had invested an amount of Rs 1000 in Nifty50 on the 3rd of Jan, 1994, today that amount would turn out to be Rs 11407 (as of 17th May 2019). Another metric we can look at is the 'Gain per day', how much do we gain each day here on if we stay invested.

Answer is: Rs 1.1.

Here is a graph that shows how this number is not prone to fluctuations and how it grows over time:

The curve is a "knee curve" with knee forming in year '1994" itself.

Here is a closer look at the three quarters of 1994:



So, the curve settle around 1.1 right in the third quarter (ending in Sep) of 1994.

This figure shows that investment in Nifty50 is profitable.

What if we invest Rs 1000 every month instead of a one time investment at the inception of the fund?

If we were to invest Rs 1000 each month in Nifty50, we would be having a current value of our investment to be Rs 1,691,507.

The figure 'Gain per day' would stand at: Rs 182.

This is a very slowly changing number:

Datetime
Gain per day
2019 May, 10
182.934
2019 May, 13
180.754
2019 May, 14
181.933
2019 May, 15
180.858
2019 May, 16
182.462


But if we look at its growth over time, it mimics the original Nifty50 curve but while the range of "Gain per day" is 0 to 185, the range of Nifty50 is 1000 to 12000.

Here is a look at the two curves, first "Gain per day":


Now, original Nifty50:



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