{"id":8586,"date":"2020-02-15T09:52:21","date_gmt":"2020-02-15T04:22:21","guid":{"rendered":"http:\/\/www.apnaplan.com\/?p=8586"},"modified":"2020-02-15T11:35:15","modified_gmt":"2020-02-15T06:05:15","slug":"sip-vs-lumpsum","status":"publish","type":"post","link":"https:\/\/www.apnaplan.com\/sip-vs-lumpsum\/","title":{"rendered":"SIP Vs. Lumpsum – Which is the Best way to Invest in Mutual Fund?"},"content":{"rendered":"

SIP (Systematic Investment Plan) or Lump sum – Which is the Best way to invest in Mutual Fund?<\/strong> Which investment method would lead to higher returns?<\/strong> A question asked by almost all new investors. We help you find an answer to this eternal debate.<\/p>\n

SIP was introduced by Franklin Templeton Mutual Fund more than 15 years back.<\/strong> The idea was simple you buy mutual fund units on a monthly basis for a fixed amount. When the markets are low you would be able to buy more units and on high markets, you\u2019ll be able to buy lesser units. This not only helped in averaging the unit price over long period of time but also helped people invest in a disciplined manner every month.<\/strong><\/p>\n

SIP vs. Lump sum \u2013 The Cash flow<\/h2>\n

SIP Vs. Lump sum choice depends on the cash you have in hand. In case you have a corpus ready you might think if you should invest in one go or do a SIP. However if you do not have a lump sum corpus and have a monthly income, you obviously have NO option but to DO SIP. Also a person whose future income is uncertain, SIP is NOT the right approach for them.<\/strong><\/p>\n

Lesson: SIP suits people who have regular monthly income<\/strong><\/span><\/p>\n

Also Read:<\/strong> Which is the Best day for SIP in Mutual Fund?<\/a><\/p><\/blockquote>\n

SIP vs. Lump sum \u2013 Higher Returns?<\/h2>\n

Assuming that you have lump sum amount and still in two minds about \u2013 should you invest in one go or spread your investment as SIP? The underlying question being which investment option would offer higher returns?<\/p>\n

To answer this we give you following five market situations from the year 2000 and see how SIP compares to the lump sum investment.<\/p>\n

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  1. Constant Declining Market<\/li>\n
  2. Constant Rising Market<\/li>\n
  3. Declining and then Rising Market<\/li>\n
  4. Rising and then Declining Market<\/li>\n
  5. Volatile Market<\/li>\n<\/ol>\n

    Here are some assumptions:<\/span><\/p>\n