Why Lump sum investment is better than SIP - chaprama | Insights from the world of Technology and Lifestyle


Friday, November 4, 2016

Why Lump sum investment is better than SIP

SIP refers to Systematic Investment Plan where the investment will be made at regular intervals usually once in a month or quarter or year. Lump sum investment refers to investing a particular amount once or at a particular time the investor wishes to invest.
Usually, financial advisers recommend SIP as a mode of investment in mutual funds as they yield consistent returns. But there is a big disadvantage of this procedure. I will explain you why I don’t recommend SIP but recommend Lump sum.
Why Lump sum investment is better than SIP

If you start a SIP with an amount of 5000rs every month for a period of 10 years, there are chances that on the day your SIP should be paid the market may rise and that would yield you lesser returns. Instead, if you opt for Lump sum plan you have a choice of investing on a day you wish and you can invest all your money whenever market crashes around 500 points so that you can expect very good returns.

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