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Above table illustrate the power of rupee cost averaging. It compares the
returns achieved by a lump sum investor and someone who saves the same
amount every month for six months.
The regular saver finishes with an investment that is more than the lump sum
investor’s after six months even though the starting price, finishing price and
average price are exactly the same. It sounds unlikely but it’s true. Check the
figures yourself.
SIP Investor : It is easy to become a systematic investor. One need to plan the
saving effectively and set aside some amount of money every month for
investment purposes in a fund that is ideally a diversified equity fund or
balanced fund. Post dated cheques can be given to the fund house. The
investor is at liberty to exit from the scheme depending on the market
conditions.