Thread by @elearnmarkets

Today, let's address one of the Golden questions in the world of Mutual Funds: SIP or Lump Sum?

(🧵) 👇

For the uninitiated, SIP stands for Systematic Investment Plan- is a type of Mutual Fund that allows #Investors to #invest in a periodic, disciplined manner

SIPs allow an investor to invest a fixed amount of money at pre-defined intervals👇

Lump-sum, on the other hand, is Investing a certain amount of money entirely in one go. So, let's compare the two

For a Lump sum, the Investors need to be alert about the market. 👇

This type of Investing does necessitate a little bit of knowledge about the market

"Timing the Market" becomes a crucial aspect of Lump Sum #Investing. An Investor can reap maximum benefits when they invest during the Market low👇

However, with SIPs, Investors get a chance to enter the market during different Market cycles. It doesn't require watching Market movements as closely👇

Rupee Cost Averaging: It is a system, in which one invests a fixed amount of money at regular intervals, irrespective of the market conditions. So, that means SIP allows an investor to take advantage of this. You must be wondering how? 👇

In SIPs, since the Investment is spread over a period of time, the average cost of #Investing comes down. The Cost Per Unit averaged out over the entire Investment period👇

The power of Compounding: Unleashed: The Interest earned on SIP investments is reinvested in the scheme. Hence, the power of Compounding helps you generate a huge sum in the end. Can you guess how much? 👇

Say you're investing Rs.5000 for 35 years with a 14% return annually. You can earn Rs.5.62 Crores at the end. Read that again. 5.62 CRORES. Pretty cool, right?👇

How did we calculate it? Using this simple calculator on ELM School: sedg.in/r95b8nuq 👇

Lower Investment requirement: You can start your SIP journey with as little as Rs.1000 per month. On the other hand, a Lump sum requires a good Capital investment, to begin with, 👇

So, what do we conclude? SIPs or Lump Sum? It all depends on you. If there is a market low, and you have some idle savings left, a Lump Sum can be a great investment👇

But, if a regular form of disciplined investment is on your radar, SIP is your ultimate tool. Here are some resources to help you further👇

@warikoo came up with a simple guide on how SIPs and Lump sum work in this video. Witty, to the point:

@vivbajaj has simplified SIP Investing with 10 Mother Stocks for fearless investing:

To learn the art of Investing, discover our @NSEIndia Academy Certified Course that offers Live Classes for an in-depth discussion⤵️

sedg.in/9r7pg5ns