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• What the report says

Systematic Investment Plan (SIP) and lump sum investments are two of the most popular investment methods. SIP is a method where you invest small amounts in mutual funds every month or at regular intervals. Lump sum investments involve investing a large sum of money in mutual funds at once. One of the biggest questions investors face is whether it is better to invest in lump sum or invest gradually through SIP. The 25-year Nifty 50 TRI data provides a clear answer to this dilemma. Sometimes SIPs are prevalent, sometimes lump sum. The whole game depends on the market movements.

What does the data say?

A comparison between a monthly SIP of Rs 10,000 (Rs 1.2 lakh per annum) and a lump sum investment of Rs 1.2 lakh per annum shows that in years when the market rose, the lump sum investment outperformed the SIP. But where the market fell or was more volatile, SIPs gave better returns.

Investing in Mutual Fund or SIP? Keep these things in mind

For example:

• 2008 (year of decline): SIP was good


• 2020 (Covid Crash): SIP was good


• 2003, 2005, 2006 and 2007 (boom period): The lump sum was good

This shows that while SIPs offer protection against volatility, lump sums excel in bull markets.

Why is SIP secure?

With each decline, you get more units, which increases future returns.

• Time stress is removed


• Easy for salaried individuals


• Discipline builds in the long run.

According to experts, SIPs make market volatility their friend. It excelled in recessions like 2008 and 2020.

When is a lump sum investment good?

• When the market is cheap or just starting to recover after a decline


• When you have bonus, provident fund or big amount


• When the investment period is 15-20 years and you have high risk taking capacity, because the entire amount is compounded from day one.

How does SIP work? What exactly is mathematics? find out

The most appropriate approach: Hybrid strategy

Experts recommend making SIP your primary investment. Invest in a lump sum and top up your SIP every year when the market crashes or you get extra funds. This combination minimizes timing issues and maximizes returns.

Note: Investments are subject to market risks. If you want to invest in this, consult a certified investment advisor first. for any profit or loss of your kind Navarashtra.com will not be responsible.