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Difference between revisions of "SIP vs Lumpsum Investments"
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| − | In general [[Systematic Investment Plan]] work great for most investors | + | In general [[Systematic Investment Plan]] work great for most investors - both novice and expert investors. |
| + | SIP tries to inculcate discipline in investing. | ||
| + | |||
| + | ==Lumpsum in bull markets?== | ||
''But, buying lumpsum in a bull market may be risky ... Isn't it? As when market goes for correction, value may depreciate. Hence timing this lumpsum is critical.'' | ''But, buying lumpsum in a bull market may be risky ... Isn't it? As when market goes for correction, value may depreciate. Hence timing this lumpsum is critical.'' | ||
| − | If you feel you are an expert investor yourself and feel that the market is giving attractive opportunities to invest in, you could go for lumpsum investments. Further, if your investment horizon is for long term, such as, say for 10 yrs, the variations in short term is immaterial. | + | If you feel you are an expert investor yourself and feel that the market is giving attractive opportunities to invest in, you could go for lumpsum investments. |
| + | |||
| + | Further, if your investment horizon is for long term, such as, say for 10 yrs, the variations in short term is immaterial. | ||
Further, for long term, in general, staying invested is more important than exiting an investment and re-entering it. Let the fund managers of the schemes determine what is good and do market-timing related decision making. | Further, for long term, in general, staying invested is more important than exiting an investment and re-entering it. Let the fund managers of the schemes determine what is good and do market-timing related decision making. | ||
| + | |||
| + | ==Lumpsum at corrections?== | ||
| + | Equity market is generally volatile. | ||
| + | |||
| + | We cannot precise know the tops nor bottoms. | ||
| + | |||
| + | So, precisely timing the market is close to impossible to anyone. | ||
| + | |||
| + | If you have some surplus cash in hand that you want to invest during market corrections, invest in a [[Systematic Transfer Plan]] (STP) mode. | ||
| + | |||
| + | Mutual Funds like [[Reliance Mutual Fund]], [[HDFC Mutual Fund]] and several others offer Daily STP as well. | ||
| + | |||
| + | So make use of such methods to top up your existing SIPs. | ||
| + | ==Related Lessons== | ||
| + | *[[Systematic Investment Plan]] and Compounding effect | ||
| + | *[[Systematic Withdrawal Plan]] (SWP) | ||
| + | *[[One Time Manadate in Mutual Funds]] | ||
| + | *[[Mutual Fund Distributor]] | ||
[[Category:Mutual Funds]] | [[Category:Mutual Funds]] | ||
| + | {{Alphabets}} | ||
Latest revision as of 09:37, 4 June 2018
| Home | Personal Finance | Mutual Funds | Equity |
In general Systematic Investment Plan work great for most investors - both novice and expert investors.
SIP tries to inculcate discipline in investing.
Lumpsum in bull markets?
But, buying lumpsum in a bull market may be risky ... Isn't it? As when market goes for correction, value may depreciate. Hence timing this lumpsum is critical.
If you feel you are an expert investor yourself and feel that the market is giving attractive opportunities to invest in, you could go for lumpsum investments.
Further, if your investment horizon is for long term, such as, say for 10 yrs, the variations in short term is immaterial.
Further, for long term, in general, staying invested is more important than exiting an investment and re-entering it. Let the fund managers of the schemes determine what is good and do market-timing related decision making.
Lumpsum at corrections?
Equity market is generally volatile.
We cannot precise know the tops nor bottoms.
So, precisely timing the market is close to impossible to anyone.
If you have some surplus cash in hand that you want to invest during market corrections, invest in a Systematic Transfer Plan (STP) mode.
Mutual Funds like Reliance Mutual Fund, HDFC Mutual Fund and several others offer Daily STP as well.
So make use of such methods to top up your existing SIPs.
Related Lessons
- Systematic Investment Plan and Compounding effect
- Systematic Withdrawal Plan (SWP)
- One Time Manadate in Mutual Funds
- Mutual Fund Distributor
| Home | Personal Finance | Mutual Funds | Equity |