SIP strategies, backtested on real data
Most “smart SIP” ideas come down to six rules. Some sell when the market falls, some follow the trend, and some change how much you put in. We ran each one through the Strategy Lab’s engine on three markets, the Nifty 50 since 1995, Nifty Midcap Momentum 50 since 2005 and the S&P 500 since 1985, against the same SIP left alone.
What they have in common
Rules that sell (the drawdown and stop-limit rules, the 200-day average, the golden cross) did one thing reliably: they cut the deepest fall, often by half. None of them reliably raised returns. The best drawdown rule looked excellent in hindsight on every market, and lost on every market when it had to be picked in advance.
Rules that add money (buy the dip, value averaging) earned more per rupee in most periods, because they buy more when prices are low. The catch is cash: a dip SIP needs spare money for dips that last years, and value averaging with a flat target stops asking for money in a rising market.
How we test
Every page uses the same method: month-end index levels, a fixed monthly SIP, money-weighted returns (XIRR), every 10-year period inside each history, and, where stated, Indian or US capital-gains tax on every sale. For the rules with settings to tune, we also check a rule chosen on the first half of the data against the second half, because a rule picked in hindsight will always look good. The figures come from the same engine that runs in your browser in the Strategy Lab, so you can check any of them.
Investing in the US? The DCA backtest is the same Lab in dollar-cost-averaging terms, on the S&P 500 in dollars.
Questions people ask
Which SIP strategy works best?
In our backtests on the Nifty 50, Midcap Momentum 50 and the S&P 500, the buy-the-dip SIP helped most often: a higher return per rupee than a plain SIP in 85% to 99% of 10-year periods. Rules that sell, like the drawdown rule and moving-average rules, mostly cut the worst fall rather than raising returns.
Do market-timing strategies beat a plain SIP?
Rarely without hindsight. The best of 31,080 drawdown rules beat a plain SIP on every market we tested, but the best rule picked on the first half of each history lost on the second half in all three.
How were these strategies tested?
On month-end index data: Nifty 50 since 1995, Nifty Midcap Momentum 50 since 2005 and the S&P 500 since 1985, with a fixed monthly SIP, money-weighted returns, every 10-year period inside each history, and Indian or US capital-gains tax where stated.
Data: official month-end closes from NSE Indices for the Nifty 50 (Nov 1995 to Aug 2026) and Nifty Midcap150 Momentum 50 (Apr 2005 to Aug 2026); S&P 500 month-end closes from Yahoo Finance (Jan 1985 to Aug 2026). All are price indices, so dividends are left out of both sides. A fixed monthly amount is invested at each month-end. Money moved out earns 6% a year in a liquid fund in India and 4% in cash for the S&P 500. Returns are money-weighted (XIRR) and before tax unless a line says otherwise; the after-tax runs use the Strategy Lab’s Indian rules (12.5% long-term and 20% short-term gains, ₹1.25 lakh exemption, liquid-fund interest at a 30% slab) and, for the S&P 500, US rules (15% long-term, 24% short-term). Rolling periods start in every month. Figures come from the same engine the Strategy Lab runs in your browser. Past returns are not a promise of future returns. Nothing here is a recommendation to buy or sell anything. See the disclaimer.