Monthly SIP or lump sum bet! Which method do smart investors choose to earn profits..

SIP is a very popular way of investing in mutual funds. The biggest advantage of SIP is that you can invest a fixed amount every month according to your convenience. You can start it from Rs 100 as well.

Flexibility in SIP

Another advantage of SIP is that it gives you flexibility, that is, you can increase or decrease the investment over time according to your income, you can stop it in between if needed, and you can withdraw money anytime.

The benefit of averaging

The advantage of SIP is that you invest in it during all the ups and downs in the market. This gives you the benefit of rupee cost averaging. When the market falls, you buy more units, and when the market rises, you buy fewer units, which reduces the average cost of your investment. Due to this, your investment keeps getting averaged.

Big fund in the long term

Financial experts believe that if you invest money in SIP for a long term and keep increasing the investment little by little as your income increases, and also remain disciplined in terms of investment, then you can create a huge fund through SIP.

This is the disadvantage.
However, the disadvantage of SIP is that you cannot take advantage of any big fall in the market. Apart from this, if you forget any installment of SIP, then you may have to pay a penalty.

Now talking about a lump sum
When you invest a lump sum in mutual funds through a lumpsum. The advantage of lump sum investment is that you can invest by looking at the market situation and can take advantage of its fluctuations. You do not have to pay any kind of penalty etc. in this.

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