Recently, I mooted an idea in AIFW FB group about manual SIPs in stocks from the coming month. I got a lot of encouraging and valuable feedback from the esteemed members. Further to that discussion, I embarked on simulating how manual SIP in stocks would have fared if I had started the same from April 2014. This post is about the manual stock experiment and results thereof.
- Monthly SIP amount = Rs. 15,000
- Stocks to invest: INFY, SUNPHARMA, HDFCBANK
- Prices are adjusted to factor in Bonus Shares and Stock Splits
- Priority (high to low): INFY ==> SUNPHARMA ==> HDFCBANK
- Stock purchases are made on the first available opportunity on either of the counters
- If there is a roll-over balance, a max. of Rs. 30,000 shall be invested in a specific stock
- Purchase criteria:
- Stock price should be below 30 DMA and 200 DMA
- Since I took a hard deadline of 1-Apr-2014, if 200 DMA is not available, 30 DMA is only considered.
- Dividends are not considered for returns calculation
- Brokerage + STT is assumed to be zero for calculation purposes
- SIP purchases doesn’t mean that I don’t add to these scrips in a lump-sum manner. However, the same is not considered for this experiment.
Now, the big question is on the choice of stocks. These are stalwarts in their market dominions and leaders in their own right. I choose IT, Pharma and Public Banks as these scrips have generally given better returns over a decent period of time.
StocksSIPSimulation sheet describes the different purchases made in different scrips in the past 23 months. From the sheet, following results can be observed:
- Bought 129 stocks at an average price of Rs. 913.16 – Total Investment: Rs. 117,798
- At CMP of Rs. 1127, the stock is returning an overall gain of 23%
- Bought 136 stocks at an average price of Rs. 771.75 – Total Investment: Rs. 104,958
- At CMP of Rs. 864, the stock is returning an overall gain of 12%
- Bought 130 stocks at an average price of Rs. 930.06 – Total Investment: Rs. 120,908
- At CMP of Rs. 989.30, the stock is returning an overall gain of 6%
From an overall portfolio perspective,
- Net Investment: Rs. 343,664
- Current Value: Rs. 391, 496
- Gain: 14%
If we consider the dividends also, there would be a total of Rs. 7000 dividend payout till date. If we add this also to the returns becomes 16%.
I need to review this simulation as this is yielding fantastic results. Please do share your thoughts/feedback/suggestions or corrections as you observe.