With more retail investors wanting to get in on the action happening in the stock markets, SIP in stocks have been gaining popularity as it allows investors to buy stocks in reasonable quantities with time, even if they cannot spare a large sum in one go. What is an SIP in stocks, how does it work, how does an SIP in stocks stack up against a lump sum investment? Should you make an SIP in stocks your preferred route to investing in equity?
If there’s one thing all mutual fund investors are clear about, it’s that SIPs are a great thing. Every time you have money to invest, it is not a given that you use SIPs (or STPs). There are times when it’s perfectly fine to be making lumpsum investments.
Human nature is generally programmed on self-destruct mode when it comes to the stock markets. We want to buy when everyone is happy and join the cheer. When everyone is forecasting doom, we want to be selling and patting ourselves for having apparently got out before the big crash. This behaviour unfortunately, is very injurious to wealth. Let me talk about the ‘falls’ or ‘crashes’ that happen in stock markets.