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SIPs vs lumpsum: Which works better now? – Why SIPs are preferred | The Economic Times
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SIPs vs lumpsum: Which works better now?
Vidhi Verma
, ET Online|
Sep 25, 2025, 03:44:59 PM IST
Why SIPs are preferred
Systematic investment plans are favoured in volatile markets as they spread risk through rupee cost averaging.
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When lumpsum works better
A lump sum can deliver stronger early gains if invested during attractive valuations or after big market corrections.
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Combining both strategies
Some investors deploy a lump sum in stable funds and use SIPs for volatile categories to balance risk and return.
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Timing matters less for SIPs
Long-term SIPs started at different market levels tend to deliver similar returns over time, reducing timing risk.
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Lump sum and compounding
Investing a lump sum early allows money to compound faster, but missing market upswings can hurt returns.
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