Ask Value Research

Is it time to make lump-sum investments?

Dhirendra Kumar explains why it may not be a good idea to make a one-time investment during the market fall

Dhirendra Kumar explains why it may not be a good idea to make a one-time investment during the market fall

हिंदी में भी पढ़ें read-in-hindi

With the Sensex tanking significantly, will this be the appropriate time to make lump-sum investments in mutual funds?
- Anonymous

No, never. For most investors, making one-time investments becomes a problem. This is because when you invest a large sum of money, then even a one per cent decline becomes unnerving, as one starts relating it to one's monthly income and it looks like one has been defrauded. So, for most individual investors, a fall in lump-sum investments becomes quite frightening.

Having said that, in my opinion, any equity investment should be done with your long-term money (five years or more). Also, this should never be invested as a lump sum. Averaging your investments is very important for managing your behavioural reactions to short-term market movements.

One can never say where the markets may go and we can only say such things with great precision once things have happened. Since you don't know what the markets have in store, being regular with your investments in high-quality funds is the key.

This article was originally published on September 05, 2019.

Disclaimer: This content is for information only and should not be considered investment advice or a recommendation.

Ask Value Research aks value research information

No question is too small. Share your queries on personal finance, mutual funds, or stocks and let us simplify things for you.


These are advertorial stories which keeps Value Research free for all. Click here to mark your interest for an ad-free experience in a paid plan

Other Categories