Uncovering the Best Investment Strategy: SIP or Lump sum?

Abstract

Mutual funds have not only contributed to the India’s growth story but have also helped families tap into the success of Indian Mutual fund Industry. Globally, there are thousands of firms offering various mutual funds schemes with different investment objectives. This study’s main objective is to compare both Systematic Investment Plan and Lumpsum Investment Plan and help the investors to make best choice. It attempts to give a very simple investment strategy for the investors who are not experts in the field but want to make money from the market without much hassle in their path. In this paper, analysis is done by using compounded annual growth rate (CAGR) for lumpsum investment plan and extended internal rate of return (XIRR) for Systematic Investment Plan. The conclusion drawn from this research paper is that Systematic Investment Plan is better as compared to Lumpsum Investment Plan.