Is lumpsum investing better than SIP?
In consistently rising markets, lumpsum yields higher returns because all money compounds from day one; SIP is safer during volatile sideways markets.
Future value of a one-time investment at an expected return rate.
Calculates the future compound value of a single one-time investment in mutual funds, stocks, or gold over long holding horizons.
FV = PV × (1 + r)^n
FV = Future Value, PV = Present Value (initial one-time investment), r = Expected annual rate of return, n = Investment tenure in years.
Inputs: One-Time Investment = ₹2,00,000 | Expected Return = 12% p.a. | Duration = 15 Years
Summary: Invested = ₹2,00,000 | Capital Gains = ₹8,94,713 | Final Value = ₹10,94,713
In consistently rising markets, lumpsum yields higher returns because all money compounds from day one; SIP is safer during volatile sideways markets.
To find real purchasing power, subtract expected inflation rate from your nominal return (e.g. 12% return - 6% inflation = 6% real return).
A Systematic Transfer Plan invests a lumpsum in a liquid debt fund and transfers fixed amounts monthly into equity to average costs.