What is Lumpsum Investment?
A lumpsum investment is when you deposit a significant amount of money in a mutual fund scheme in one go, unlike SIP where you invest small amounts monthly.
When to choose Lumpsum?
Lumpsum investments are best when:
- You receive a bonus, gift, or inheritance.
- The market is low (undervalued), allowing you to buy more units at a cheaper price.
- You have a long-term horizon (5+ years) to ride out market volatility.
SIP vs Lumpsum
SIP helps in averaging cost and disciplining savings.Lumpsum is riskier but can generate higher returns if timed correctly during a market dip.