SIP vs. Lump Sum Investment

SIP allows individuals to invest a fixed amount regularly, usually monthly, in a selected mutual fund scheme. But what does SIP really mean, and why is it essential for investors? Let's explore the concept of SIP and its benefits in detail.

Both SIP and lump sum investments have their advantages and disadvantages.

SIP advantages

  • keeps market timing risk at bay
  • increases financial discipline
  • All investors, especially beginners, should find this suitable.

Con's of SIP

  • perhaps not win from quick market increases
  • initially making smaller investments

Advantages of Lump-Sum Investment

  • exposure to market gains right away
  • greater investment opportunity

The Drawbacks of Lump Sum Investment

  • Risky in terms of market timing
  • requires payment in one single sum

 

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