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Why SIPs Work

Systematic investments in mutual funds give you the benefits of compounding & averaging over time

Over the past three years I have made monthly SIP investments of Rs 10,000 and now want to invest the lump sum that has been built. Is it safe to invest in lump sum or should I continue my SIP?
-Praveen Shukla

Assuming you invested in a broad equity diversified fund that earned about 15 per cent annualised returns it would have help you build a corpus of Rs 4.56 lakh. This investment demonstrates the benefits of systematic investments which help you invest regularly and benefit from the power of compounding and averaging of investments over time. You should continue investing through SIPs and regularly review the performance of the fund that you invest in.



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