Lesson 34 of 53 · Lump sum or SIP · 3 min read · Reviewed 29 Oct 2026
A lump sum is in the market for longer, so in a rising market it usually ends higher. A SIP spreads the entry price, which lowers the regret of investing just before a fall. Most salaried investors don’t choose: their money arrives monthly, so a SIP is how it gets invested. For a windfall, spreading it over a few months is a middle path.
Money invested at once has more time in the market. If prices rise over the period, it ends ahead.
A SIP buys more units when prices are low and fewer when high, so a fall early on hurts less.
A SIP suits money that arrives monthly, like a salary.
Key idea: For a bonus or sale proceeds, a liquid fund with a monthly transfer into equity spreads the entry over a few months.
Try the short quiz on this page to check what stuck.
No. It averages the price paid; it does not protect against a fall that lasts.
No, it is a way of paying into a fund. The fund carries the risk.
A systematic transfer plan: a fixed amount moves each month from one fund to another in the same fund house.
For learning only, not investment advice. Built in India by a team that tracks its own money on Reva.