Illustration

Lump sum Investor

     (a) Amount Invested  

50000

     Price Per share

10

     Number of shares Received

5000

 

     After 5 months 

 

     Share Price 

13

     (b) Value of shares  (Number of shares x Price Per share) 

65000

 

     Profit (b-a) 

15000

Systematic Investing

Month

Amount Invested

Price of share

Number of shares Received

1

10000

10

1000

2

10000

9

1111

3

10000

7

1429

4

10000

11

909

5

10000

13

769

Total

50000

 

5218

 

 

 

 

     (a) Total Amount Invested

 

50000

 

     Number of shares Received

 

5218

 

 

 

 

 

     After 5 months

 

 

 

     Share Price

 

13

 

     (b) Value of shares (Number of shares x Price Per share) 

67834

 

 

 

 

 

     Profit (b-a)

 

17834

 

At the end of five months, the lump makes a profit of Rs. 15000, although he has seen the cost of his units rise as well as fall. The SIP portfolio, on the other hand, by virtue of picking up additional units when market dipped, gets a sizeable boost and delivers a even higher profit of Rs. 17934.