SIP vs Lump Sum investment: Which one is better for you?


SIP and lump sum, both investment strategies, exhibit varying performance levels in certain market periods. The market can correct right away after you invest your lump payment, so be prepared for that eventuality. In this case, the SIP method would have resulted in a lower average buy price per index fund unit. If you had invested through SIP during a period of decreasing stock prices, you might have purchased more mutual fund units for the same amount. 

On the other hand, lump sum investments would have done better than those made through the SIP approach if the market were consistently rising. 

SIPs may seem an easy benefitting method of investing to some investors. However, if you are one of them, don't forget to take advantage of the SIP return calculator before investing.

People should base their investments on their cash flows. SIP investments are the best option if you are a salaried professional who receives a monthly salary. Small investments can be made without straining your wallet.

Read also: Investing in International Mutual Fund Schemes: The Benefits and Risks


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