Difference between SIP and lumpsum

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Accepted Answer

SIP and lumpsum are two different investment methods. SIP involves regular investments at fixed intervals, while lumpsum involves a one-time investment.

SIP stands for Systematic Investment Plan, where investors invest a fixed amount at regular intervals, such as monthly or quarterly.
Lumpsum refers to a one-time investment of a large sum of money.
SIP allows investors to benefit from rupee cost averaging and compounding over time.
Lumpsum investments are suitable for investors who have a large amount of money available at once.
SIP helps in reducing the impact of market volatility as investments are spread over a period of time.
Lumpsum investments can be advantageous during market downturns when prices are low.
SIP is a disciplined approach to investing, suitable for long-term goals.
Lumpsum investments are more suitable for short-term goals or when investors have a lump sum of money available.
Example: Investing Rs. 5,000 every month in an SIP for 5 years vs. investing Rs. 3,00,000 at once in a lumpsum investment.

Difference between SIP and lumpsum

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