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Comparing SIP VS Lumpsum Investing: Which One Is Right For You?

SIPs and Lumpsum are both popular strategies for investing. One can choose the strategy according to their financial goals and requirements. In this blog, we will learn various aspects of both SIP and Lumpsum investing in different market situations.
April 18, 2024
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Understanding SIP And Lumpsum Investing

A Systematic Investment Plan (SIP) helps you to invest a specified amount of money in a mutual fund plan at regular intervals, such as once a month or once a quarter. SIP allows someone to invest a certain amount of money in a scheme of mutual funds at predetermined intervals. It also aids in averaging out the cost of investing by allowing the investor to purchase more units when the market is low and fewer units when the market is high. This can assist to mitigate the effects of market volatility on the investments of an investor.

A lumpsum investment is another  way to invest money in financial products such as life insurance, mutual funds, term deposits, and so forth.  While lump sum investing is riskier if the market falls soon after the investment is made, it  also offers the potential for larger long-term profits since the investment has more time to develop.

For Example: If an investor has a large sum of money saved up, instead of investing it gradually over time, they might invest it all at once in a single stock, a mutual fund, or a mix of several financial instruments. However at Cube we recommend you to consult a wealth coach for better guidance while choosing between SIPs and Lumpsums.

Pros And Cons Of SIP Investing

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