Should I opt for a weekly Systematic Transfer Plan (STP)?

Is it wise to opt for a weekly systematic transfer plan (STP) instead of a monthly SIP?
- Prathimesh

If you wish to do, it's fine. However, over a period of time, it doesn't make much of a difference. We haven't seen any empirical evidence supporting one frequency over the other.

Apparently, weekly averaging may seem to work better and help you capture some downside amid market volatility. However, the real story is that as you accumulate your savings, the market has to really go up over a period of time. Being methodical with your investments is the key here. For example, if somebody makes an annual investment in a tax-saving fund every February with a horizon of 30 years, then he/she is an SIP investor who will be able to average his/her investments over a period of time. So, the frequency of investment doesn't really matter. If you think that you will stick to your SIP schedule with a weekly one, then go ahead.

This article was originally published on June 28, 2019.