Lumpsum Investments Vs SIP; The Best Option -: Lumpsum or systematic investment, which one is best for any investor do not have any specific answer. Few financial advisors believe that SIP is better than lumpsum in equity market where some belief the opposite. There are equally good arguments about lumpsum and the SIPs. But they have their merits and demerits.

Investment is mutual fund is rather confusing than fast. Both are equally exciting but the investment pattern mostly depends on upon cash flows. If an investor has cash surplus then he can invest in one go where SIP is a regular process. Commonly people consider SIP is a better model than lumpsum investment.

SIP is the best plan for the people who have a regular steady income. They can invest the amount regularly without any influence but through a regular process. This process is very good for the young investments. They can investment small amount over a long period of time. To get a good return an investor either needs to increase the amount or increase the time horizon. So an early start of SIP is good enough to meet the investor’s long term goal.
Lumpsum investment is good for the investors who are seasoned. Seasoned investors understand the market better than newcomers. They usually are not fearful of investing the money when the market goes through a correction or the valuation attracts them. It is also good for those investors who do not have regular cash flows.

Disclaimer: Mutual funds are subject to market risks. Please read all scheme related documents carefully before investing. This article is neither encouraging not discouraging you to invest. Please consult your financial advisor before investing. Author takes no burden for any kind of investments, profits and losses. Past performance does not guarantee any future returns.

This article is written by Soumya Sarkar. Soumya is a MBA from a reputed business school and worked with International banks like HSBC & Standard Chartered. He founded Wealth Redefine in 2014. He can be reached at soumya@wealthredefine.in