SIP vs Lumpsum: Which Mutual Fund Route Works Better?
Antara Bhattacharyya
SIP suits disciplined investors by spreading investments over time, reducing market timing risk, encouraging consistency, and managing volatility during cycles.
Lumpsum investing works well when markets are undervalued, offering higher growth potential when timing aligns with long-term investment goals.
SIP reduces emotional investing by averaging purchase costs, while lump-sum investing exposes capital to short-term volatility immediately after the investment decision.
SIP fits salaried investors with regular income streams, whereas lumpsum suits those with surplus funds available upfront for investment planning.
Choosing between SIP and lumpsum depends on risk tolerance, market outlook, investment horizon, and personal financial discipline levels and goals.