• #924 (no title)
  • Contact now
  • FAQ
Newsletter
The Daily Voice News
Advertisement
  • US
  • World
  • Stock Market
  • Technology
  • Science
No Result
View All Result
  • US
  • World
  • Stock Market
  • Technology
  • Science
No Result
View All Result
The Daily Voice News
No Result
View All Result

Which Should You Choose: SIP or Lump Sum Mode?

Claire Jesse by Claire Jesse
April 7, 2021
in Finance
0
Which Should You Choose: SIP or Lump Sum Mode?

SIP or a one-time lump sum payment are the two primary ways to invest in mutual funds. The former implies periodic investments of small amounts, while the latter involves investing the entire amount in one go. While both have their pros and cons, not everyone has a large capital base to make a one-time payment. The choice of investment mode, therefore, needs to be based on your payment ability and the benefits of each mode.

So, here’s a look at what you need to know about the two modes to make an informed investment decision.

Benefits of SIP

Investors can make the most of rupee-cost averaging in case they are aiming for a longer investment timeframe. What happens is that you become capable of purchasing multiple units at different price points, which improves the chances of earning profits. This is possible even in a volatile market situation. The investment is spread out over time, while inculcating financial discipline, which is an excellent way to build wealth.

Investors can choose to make payments weekly, monthly, quarterly or yearly. So, the SIP route also gives you flexibility to choose the tenure. Plus, you can set up the automated payments so that you don’t need to worry about due dates and whether regular payments are made.

It is an ideal choice if you do not have a big amount readily available. SIPs are also a good idea to anyone who wishes to play safe. However, make sure to stay invested as long as possible and avoid withdrawing when the market is going downhill. This is because a longer timeframe helps even out losses.

Benefits of Lump Sum

Investors can purchase the units all in one go. This convenient one-time payment is often opted for since it helps create significant liquidity and wealth. However, you need to have substantial capital at hand to do so. Also, make sure you check your risk tolerance. Higher return instruments, like equities, often also come with higher risks. So, if you wish for low equity allocation, you are can invest a lump sum in debt mutual funds.

Factors to Consider Beforehand

Market volatility is one of the most important factors when it comes to picking SIP or lump sum investment in debt mutual funds. For example, when the stock market trends upwards, lump sum could be useful, while SIP will be more beneficial for a longer-term horizon. Further, you should analyze your personal behaviour. Anyone who is lazy about financial commitments might not be able to maintain the regular SIP investment, unless it is automated. Lastly, SIP is a great choice for salaried people, while lump sum might work for self-employed individuals.

For both financial options, you need to be patient through the various market cycles. Further, consider your income and judge your financial situation to make the right choice. There is no one-size-fits-all solution to wealth creation. You need to find what suits you the best.

Previous Post

Homeowners Guide To Slab Leaks, Causes, Signs, Dangers, and Repair

Next Post

4 Ways to Keep Your Bones Strong and Healthy

Related Posts

Want to make your digital payments quicker?

Want to make your digital payments quicker?

by Claire Jesse
April 28, 2022
0

The growing popularity of smartphones and mobile apps is mainly due to the convenience of making payments online. People choose...

How to Arrive at the Ideal Home Loan Tenure to Suit Your Pocket

How to Arrive at the Ideal Home Loan Tenure to Suit Your Pocket

by Claire Jesse
March 30, 2022
0

An increasing number of Indians opt for their own homes rather than renting. The availability of affordable house loan EMIs...

Ways to Protect Your Loved Ones with a Medical Loan Without Stressing About Finances

Ways to Protect Your Loved Ones with a Medical Loan Without Stressing About Finances

by Claire Jesse
March 28, 2022
0

The love of one’s family is the greatest gift and often the driving force of an individual. However, despite trying...

WHICH MUTUAL FUND SHOULD I CHOOSE FOR LONG-TERM INVESTMENTS?

WHICH MUTUAL FUND SHOULD I CHOOSE FOR LONG-TERM INVESTMENTS?

by Claire Jesse
March 1, 2022
0

Long-term investing is all about investing in the right investment options and waiting it out patiently to redeem them to...

BITCOIN & BANKS

BITCOIN & BANKS

by Claire Jesse
February 16, 2022
0

Blockchain technology has grown in popularity over the last few years. Cryptocurrencies, NFTs, and other cryptos are all possible with...

Load More
Hanging Lights Ideas To Illuminate Your Home

Hanging Lights Ideas To Illuminate Your Home

June 24, 2022
Vital Things You Should Know When Hiring a Nanny

Vital Things You Should Know When Hiring a Nanny

June 20, 2022
Mark Roemer Oakland Examines A Few Things You Can Do Before Summer Ends

Mark Roemer Oakland Examines A Few Things You Can Do Before Summer Ends

June 18, 2022

Recent Posts

  • Hanging Lights Ideas To Illuminate Your Home June 24, 2022
  • Vital Things You Should Know When Hiring a Nanny June 20, 2022
  • Mark Roemer Oakland Examines A Few Things You Can Do Before Summer Ends June 18, 2022
  • Miki Agrawal Disrupts Societal Standards With TUSHY June 14, 2022
  • Gaming Pcs On A Budget: How To Get The Best For Your Money June 6, 2022
  • The Importance of Transactional Emails for a Small Business  May 31, 2022
  • How To Stop Rats From Climbing Drain Pipes? May 27, 2022
  • 6 myths around ULIPs & why you should not believe them May 27, 2022
  • How Can A Virtual Assistant Help You? May 25, 2022

2022

  • – June (5)
    • Hanging Lights Ideas To Illuminate Your Home
    • Vital Things You Should Know When Hiring a Nanny
    • Mark Roemer Oakland Examines A Few Things You Can Do Before Summer Ends
    • Miki Agrawal Disrupts Societal Standards With TUSHY
    • Gaming Pcs On A Budget: How To Get The Best For Your Money
  • + May (14)
  • + April (10)
  • + March (32)
  • + February (12)
  • + January (9)

2021

  • + December (11)
  • + November (7)
  • + October (11)
  • + September (14)
  • + August (8)
  • + July (11)
  • + June (10)
  • + May (6)
  • + April (21)
  • + March (14)
  • + February (6)
  • + January (16)

2020

  • + December (14)
  • + November (17)
  • + October (16)
  • + September (5)
  • + August (8)
  • + July (5)
  • + June (7)
  • + May (5)
  • + April (16)
  • + March (11)
  • + February (7)
  • + January (5)

2019

  • + December (2)
  • + November (1)
  • + October (2)
  • + September (1)
  • + August (1)
  • + July (7)
  • + June (8)
  • + May (13)
  • + April (11)
  • + March (5)
  • + February (2)
  • US
  • World
  • Stock Market
  • Technology
  • Science

Copyright © 2019 The Daily Voice News. All Rights Reserved.

No Result
View All Result
  • #924 (no title)
  • Contact now
  • FAQ

Copyright © 2019 The Daily Voice News. All Rights Reserved.