The difference between Lumpsum and SIP explained
Lumpsum Investment Systematic Investment Plan You invest a large sum in one go. You invest small amounts periodically, like every month. Ideal when prices are not volatile and are likely to steadily rise. Best in most conditions, but particularly when markets are volatile. You must time the market to get the best returns. You don’t need to time the market; just keep investing regularly. Good for seasoned investors, who have a higher risk appetite. Good for most investors, who prefer lower risk. Good for investments in liquid funds, which provide stable returns. Great for investments in equity mutual funds, where returns are volatile.
Lumpsum Investment |
Systematic Investment Plan |
You invest a large sum in one go. |
You invest small amounts periodically, like every month. |
Ideal when prices are not volatile and are likely to steadily rise. |
Best in most conditions, but particularly when markets are volatile. |
You must time the market to get the best returns. |
You don’t need to time the market; just keep investing regularly. |
Good for seasoned investors, who have a higher risk appetite. |
Good for most investors, who prefer lower risk. |
Good for investments in liquid funds, which provide stable returns. |
Great for investments in equity mutual funds, where returns are volatile. |
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