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Where should I invest through a SIP and through a lump sum?

Here's some advice from Dhirendra Kumar on why it's best to avoid investing lump sums

Where should I invest through a SIP and through a lump sum?

Kindly suggest funds for a period of eight-ten years. Also, please specify both investing through an SIP and making a one-time investment.
- Ramesh

Answering the second part of your question first, my suggestion will be to not get lured by the current market scenario and invest only through SIPs. Market volatility can be very intimidating and investing lump sums can scare you out of the market. Still, if you want to invest a lump sum, consider spreading it over a time frame of 3-10 months.

Regarding the funds to invest in, if you're a first-time investor, then consider investing in an aggressive hybrid fund through an SIP. Since aggressive hybrid funds have 65:35 equity to debt allocation, the in-built debt portion acts as a cushion. This will help you get accustomed to volatility without witnessing any severe fall.

However, if you have been investing for a while now, then you can consider taking an all-equity exposure by investing in a multi-cap fund. Having said that, if you are a tax-paying investor, choose an ELSS fund.

To reiterate, make sure that not to get lured by the market current declines and invest through SIPs. This is because we do not know about market moods. In the previous weeks, we saw a decline of as much as about 35 per cent, which turned into about 22 per cent. In between, we also saw some upward movements. So, we can't precisely say how the markets may move. Therefore, it's best to devise a rule in terms of investing long-term money in equity and ensuring zero violation of the same.

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