Flight 4 · Lesson 2 of 6

SIP vs Lump Sum

Choose investments that match your goals, not someone else's.

1 min readEducation, not advice

A SIP (Systematic Investment Plan) invests a fixed amount on a fixed date every month. A lump sum invests everything at once. Both buy the same fund; they differ only in timing.

A SIP removes the question of when to invest. Some months you buy at a high price, some at a low, and the average works out. It also matches how most people earn: monthly. A lump sum is right when the money already exists and the horizon is long, because waiting to deploy it has its own cost.

If a lump sum makes you nervous, split it across six to twelve months. The difference in outcome is usually small; the difference in how you feel on a red day is large, and feeling is what decides whether you stay invested.

Buzz Bite

A SIP is not a return strategy. It is a stay-invested strategy.

In this Flight
  1. Matching Funds to Financial Goals
  2. SIP vs Lump Sum
  3. Growth vs IDCW
  4. How to Read a Fund Factsheet
  5. What Makes a Good Mutual Fund?
  6. Understanding Fund Ratings
← Matching Funds to Financial GoalsGrowth vs IDCW →

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