The SIP Advantage

A couple of days ago, I received a question from an investor who was puzzled by how systematic investment plan (SIP) returns over a period could be less than non-SIP (lump-sum) returns. He went to an online investing website and saw that for a particular fund, non-SIP returns over the period were high, but the SIP returns were much lower. The investor seemed to think that there was some sort of a problem in this. Actually, the problem lies entirely in the public perception of how an SIP works and what its exact purpose is. The systematic style of investing is actively promoted by practically everyone who gives advice about fund investing. Whether these are fund companies, advisors