Yojak finds his friend Yogesh confused whether to invest in SIP or invest Lumpsum into the market.

Yojak explains both concepts to his friend:

SIP is a disciplined form of investing where you save every month. So you invest when the market is high as well when the market is low giving you a weighted average return over a period of time.

Lumpsum investment is investing the entire amount in one go and requires a better understanding of the market trends.

The advantages of SIP are:

1. It gives you a disciplined way of investing
2. Helps with rupee cost averaging
3. You don’t need to time the market

In Lumpsum investing if you time the market and invest at the right time ie. When the market is low, you might make more returns compared to SIP.

Yojak explains that the most successful strategy therefore is a combination of both strategies. This means buy when the market is low and sell when the market is high and be disciplined with your investing habits.