From my own personal experience and understanding, one must always go with SIP when investing in mutual funds—even when they have a large capital lying around. So, irrespective of the current Indian market condition, I would suggest you opt for Systematic Investment Plan (SIP), which is much more beneficial.
(Courtesy: Financial Express)
For instance, SIP reduces the time leverage; meaning, you don’t necessarily have to time your investment to ensure good returns. You consistently put your money in the asset—and over the period, your losses and profits will eventually average out, delivering you decent returns if not exceptional. Second, this way of investing in mutual funds is much saner for those who are just starting in the market—who’s a new investor. You don’t want to put all your money in one area even when you’re fully sure of your decision, let alone being a newbie. Investing money on an interval will shape your habit to be a much-disciplined investor and will give you enough time to understand the market and other dimensions to maximize your returns.
In fact, I even recommend that if you’re too drawn to invest in a lump sum, you rather put that money in the liquid fund and then start SIP from debt to equity fund. I have personally seen many people make big returns through this model.
(Courtesy: value Research)
Addressing your specific question about ‘current Indian market’ – the current Indian market is at its fluent best. Keeping aside the paranoia of an imminent recession which will guide the market to a big crash, everything seems good at the moment. In fact, mutual funds asset grew from Rs 16.46 lakh crore in December 2016 to Rs 21.37 lakh crore in December. It’s incredible and there’s a kind of euphoria among the investors. This calls in for extreme caution. The market can take a U-turn at any time. And the heightening worries of a trade war between USA and China, among other global issues, you certainly do not want to be investing in mutual funds in a lump sum at this moment. It would be a fatal mistake if you ask me. So, again, SIP is the way to go.
Hope this helped!!
