A lump sum investment involves investing in a mutual fund at one time. This approach can be suitable if you either have a significant amount of money to invest or do not earn a consistent monthly income. However, you carry the risk of timing the market while investing lump sum money.
An SIP (Systematic Investment Plan), on the other hand, allows you to invest a fixed amount of money regularly (usually monthly) in a mutual fund. This method helps reduce the impact of market volatility and averages the cost of investment over time. SIPs are ideal for investors looking to build wealth steadily with disciplined investing.
