What is difference between One Time Investment and Systematic Investment Process? Which is most profitable investing in SIP or one time investment in stocks?

 You see nowadays the banking sectors offering 2.5 % to 3.5 % interest per annum in every savings account in India. And if you invest in a SIP or in any Stocks or in Mutual Fund or in any FD,  no doubt it will be more profitable in long term. Obviously you have to check all other informations that can help you to get a good return of interest.

Today's are discussing topic is- what is bette? nvesting in a stock in one time with a big amount or investing in SIP monthly basis or quarterly basis either yearly with small small amount, whatever you want.

For discussing the above query, we are assuming that you have invested in stock name by Urja Global Limited. When you have invest the money it was around Rs. 10/share. In same time you have also invested in SIP in same stock in same price(Quarterly Besis). And after you in Investment the stock price decreases Rs. 1 in every 3 months.

After 1 year in one time investment: 

Now, You will find that in One Time Investment after 1 year price decreases at 6 rupees. So you have to bear capital losses of Rs. 4 for each shares.

After 3 month in SIP

In the other hand you are investing in the same stock in SIP in quarterly basis. It means that you will invest in same stock yearly four times with same equal amount. Now you will find that 3 months after of first investment you are going through a loss of Rs. 1 per share(as stock price decreases Rs. 1 in every 3 months)

Then, you invested second time in the same stock in current market price which is 9 Per Share. Here you have two stocks first one you have Purchased at Rs. 10 and second one purchased at Rs. 9. So the average price of a share is Rs. 9.50 per share. After average loss per share. 0.5 per share. 

After 6 months:

Now you will find that 6 months after of 2 investment you are going through a loss of Rs. 0.5 per share(as stock price decreases Rs. 1 in every 3 months)

Then, you invested third time in the same stock in current market price which is 8 Per Share. Here you have three stocks first one you have purchased at Rs. 10 per share and second one purchased at Rs. 9 per share, the third one purchased at Rs. 8 per share. So the average price of a share is {(10+9+8)÷3} = Rs. 9 per share. After average loss per share 1 per share.

After 9 months:

Now you will find that 9 months after of 3 investment you are going through a loss of Rs. 1 per share(as stock price decreases Rs. 1 in every 3 months)

Then, you invested last time in the same stock in current market price which is 7 Per Share. Here you have four stocks first one you have purchased at Rs. 10 per share and second one purchased at Rs. 9 per share, the third one purchased at Rs. 8 per share and last one Rs. 7 per share. So the average price of a share is {(10+9+8+7)÷4} = Rs. 8.5 per share.After average loss per share 1.5 per share.

After 1 year in SIP

You will find loss of a rupees 1.5 + same month loss 1. Total of Rs. 2.5 loss per share.

So from the above calculation we have found that in one time investment we have a loss of rupees 4 Persia and in other hand 2.5 rupees loss per share in SIP, which is very much lower than one time investment loss.

 Here from you are getting a light consideration that investing in a SIP is more profitable other than investing in one time investment.

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