Got a bonus? An inheritance? That big question: invest it all now (lumpsum) or spread it out (SIP)? Let's decode which strategy works best for salaried investors in India.
A Systematic Investment Plan (SIP) is like a monthly financial gym membership. Fixed amounts invested regularly. Benefits from Rupee Cost Averaging, buying more units when markets dip. Ideal for long-term wealth.
Lumpsum means investing a large sum at once. Best when markets are undervalued or after a correction, allowing full capital to compound immediately. Historically can outperform in rising markets.
Received a windfall? Consider a Systematic Transfer Plan (STP). Invest your lumpsum in a low-risk fund, then transfer amounts gradually to equity. Combines lumpsum deployment with SIP's averaging benefits.
SIPs thrive in volatile or falling markets by buying more units cheap, setting you up for recovery. Lumpsum can excel in strong bull runs if timed perfectly. SIPs offer emotional stability for most.
Don't try to time the market with lumpsums. Never stop SIPs during dips—that's when they work hardest! Match investment type to your goal horizon. Don't overlook STPs for large windfalls.
Ready to make an intentional plan? Don't just sit on that bonus! Use a goal-based SIP calculator to bring your dreams into focus. Visit sipplancalculator.in now! Happy investing!