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Systematic investment v/s lump sum investment in equity funds and debt funds

An investor can opt for a lumpsum investment or Systematic Investment plan (SIP) in equities and equity MFs. SIPs capture the wide fluctuations in the equities which do not grow in a linear way[1]. SIPs average out the cost of investment and accumulate more units over longer periods. This concept is called rupee-cost averaging. Unlike equities, in case of debt funds or any other fixed income instrument, lumpsum investment is preferable to a staggered one (FD v/s Recurring deposit) since the return rises in a linear way. Higher the investment at the lower point, higher will be the return. 

Read More at The Financial Express News date : 4 Jan 2019, Friday

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