SIP vs Lumpsum Investing - The better choice
Which one can you choose, Rented Home (or) Lease (or) Buy it ?
This is the choice we have for a home, as for the savings or investing, we had a plenty of investment products like Bank Savings and Deposits, Bonds, Mutual Funds, Stocks, Realty, gold, etc. But, it's all about how we started it. As a traditional background in our country, we mostly choose our choice like Regular small savings from our grandparents. The old method of savings or investing are a collection box called as
Hundial, Postal small savings, Bank fixed deposits, buying a gold in a very small quantity, purchasing a piece of land for our children. Nowadays, it becomes more fashion as the investment method changes slightly with a Regular savings frequency mode and a bulky amount of deal at once. That is what we called earlier, Recurring deposits and Fixed deposits. Now it comes with the word, "
Systematic investment plan (Recurring) and a
Lump sum investing (Fixed deposit). So, now we are talking about the fashionable SIP and Lump sum investing.
SIP (Systematic Investment Plan):
'
SIP' is nothing but drink something by taking in small, like 'he took a
sip of the Red wine' :)☺
Systematic Investment Plan (SIP) is an investment method that usually given by the mutual funds to its investors, to invest their money in a fixed amounts as periodically. This frequency mode may be weekly, monthly or quarterly. This SIP investment method is a disciplined strategy that the investors can make 'Rupee Cost Averaging', while the market price is low or high, it benefits the investors.
It is usually recommended for the small and retail investors who don't have the large amount of money to invest.
Lump sum investing:
It is an investment method with a Single (or) One time payment of investing. When you have a large amount of money on your hand to invest and if you couldn't able to invest regularly, then this is your better choice of investing at once.
It benefits the investors especially for the medium - to - large, who can utilize the market when it is low or Market crash.
It also gives the benefit of the Power of Compounding gets itself from the first day of investing, but you should be aware about the Market fundamentals and its movements like Economic factors.
