Hmmm, Read your article ... Need to present a "for" argument on SIP; Bear in mind that I am not arguing against you. It is just a debate on SIP. It is not personal at all.
Basically, a SIP strategy forces noob investors (with some long horizon) to get into the habit of investing and prevent them from getting discouraged.
I wanted to tell people why SIP is not the holy grail, the mutual fund industry shows it to be. I wanted to provide my opinion as to why I don't like it as an analyst.
BASIC thing taught in value investing is that, "buy in depression!" as you pointed out that a layman investor cannot do the detailed study and of the market, but a professional analyst has the full skill set to accomplish it.
The idea is not to catch the rock bottom but to get a lower price as compared to the value of the security.
People often confuse growth investing as fundamental investing, which states "growth at any price". Value investing is opposite of that. Price and value are main factors for us.
Now to help you more, I will give you brief history about the mutual fund industry. Archaic funds were generally hedge funds, in which the fund manager has a considerable capital at stake. And he was joined by many rich investors.
Now the mutual fund is the common man form of that hedge fund of past times. But there are BIG differences now, A the fund manager is bound by mandate so even if he is a good manager, he will be bound by rules.
Second mutual fund managers are salaried employees, they dont own stake in the fund, think about it. Letting someone who has nothing to lose even if your life savings go for a ****.
As salaried employees fund managers are now more focused on short term performance rather than long term. You ask why? Because even though funds have long term views, bonus to fund managers is given on quarterly basis.
The main focus of the fund manager is to give good performance just in time for bonus then tumhare paise ki mc bc.
The amount of freedom that old hedge fund managers had is being resurrected by private fund managers who are running funds under LLPs.
Coming back to SIP,
the mutual fund industry needs constant money flow, this can be obtained by locking people into SIPs, people who bought at 2007 and 2010 highs are still blaming the market for their loss!
Rather than blaming their flawed investment method. Why is it flawed? Because it gives to regard to price! PRICE IS ALL MIGHTY! SIP is taking the flawed assumption of growth at any price. which we all know doesn't work.
There is no argument for SIP except the fact that it is holy grail only for the industry and not new investor. I also never recommend layman investor to invest in individual stocks.
Either take help from an good analyst or same money in RD and invest during each market crash by buying ETFs.
Hope this clears your doubts, will love to clear more if you want. BTW there are many other interesting articles on my website that you will find eye opening.
As unlike other analysts and industry people, I don't sweet talk about bad practices. I tell my opinion and call it as I see it.
You might have notices that many successful investors, watch over the market like hawks, and only strike when there is blood flowing and everyone is shitting their pants. That my friend is the key!