I am 35 year old housewife residing in Honavar with my daughter. I have been watching Mutual Funds Sahi Hai ads on television and want to invest in mutual funds. I have a doubt. Should I invest in mutual funds via SIP or lumpsum. I prefer lumpsum. Please advise.
If you switch on your TV, you will see the highly popular Ad, Mutual Funds Sahi Hai. This is a campaign launched by AMFI (Association of Mutual Funds in India), whose aim is to create awareness on mutual funds. As a rule, you should invest in debt schemes to achieve your short-term financial goals which are less than three years. You may invest in equity schemes to achieve your long-term goals that are five years away or more. It is okay to invest a lumpsum in debt mutual fund schemes. However, it is better to stagger your investments in equity mutual funds, as it will help you to avoid catching the market at a particular level and average your purchase cost. You can invest through a Systematic Investment Plan (SIP) to make regular investments with the money in your bank account. SIP means you invest a certain pre-determined amount, (amount you have decided beforehand), at regular intervals of time, in the mutual fund. If you have a lumpsum, you may also invest the money in a liquid scheme and start a Systematic Transfer Plan (STP) (which is essentially transferring investment from one asset type to another) in an equity mutual fund scheme. If you are not familiar with mutual funds do take the help of a financial advisor.
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