Lumpsum Vs SIP Investment
I've often been asked about the choice between SIP (Systematic Investment Plan) and lump sum investments, with people wondering which is the superior option. Here's my analysis: Lump Sum Investment : Advantages: Immediate investment: You deploy a large sum of money into the market all at once. Potential for higher returns: If the market performs well over time, your entire investment benefits from the growth. Disadvantages: Exposure to market timing risk: If you invest when the market is high and it subsequently drops, you could experience significant losses. Psychological pressure: A lump sum investment can cause anxiety, especially during market volatility, as you might worry about the timing of your investment. SIP (Systematic Investment Plan): Advantages: Rupee cost averaging: By investing a fixed amount regularly, you buy more units when prices are low and fewer when prices are high, potentially reducing the impact of market volatility. Disciplined investing:...