When markets get rocky, the classic dilemma hits: Should you invest a big chunk of money (Lumpsum) or stick to your regular Systematic Investment Plan (SIP)? Let's dive in!
Volatile markets: the classic dilemma. Do you invest a big lump sum, or stick to regular SIPs? Both aim for max mutual fund returns, but their strategies differ greatly during market swings.
SIPs automate discipline & leverage Rupee Cost Averaging. You buy more units when prices are low, fewer when high. It's 'time in market,' not 'timing,' making it ideal for most investors.
Lumpsum shines during deep market corrections (20-30% drop), but only for those with idle cash, a long horizon (5-7+ years), and steely nerves to invest when others panic.
My favourite: Maintain SIPs, then strategically deploy partial lump sums from windfalls (e.g., bonuses) via STP during significant 10-15% market corrections. Best of both worlds!
Don't stop SIPs during dips! Avoid FOMO lump sums, don't try to time every rupee, ensure an emergency fund, and always respect your personal risk tolerance.
Ready to optimize your mutual fund investments? Use our SIP and goal calculators to map out your journey and achieve your financial milestones. Visit sipplancalculator.in today!