Should I do ain a and a bit every month or all the money at one go? This is one of the most common questions that comes to the minds of investors, new or experienced.
Why do you think you are thinking about this?
Think about why this question is coming to your mind. You are probably thinking that “everything at a go sounds a bit risky. After all, what if the market suddenly falls? My value will go down.”
The markets can also go the other way and yourvalue might go up. Thus, the confusion in your mind.
The reality is that nobody has really been able to predict the markets so you are left with an equal chance of the market going up or going down. The markets are equally unreadable for everyone.
Do you want to know a curious truth?
History and power of compounding tells us thatearlier matters more than anything else. So, earlier is better than later.
Anis simply a way to when you have the money. Most of us don’t have large sums appearing suddenly. We get a salary and a little bit of that every month. At that point, that is the lump sum!
But if you do have a lump sum toyou can choose to go the way or it all at one go. at one go is technically better, but it will hardly matter, as the difference in returns for a long term investor will not be too great.
We understand that while your mind may understand the logic, your heart will still be circumspect. What if the day after you decide tothe market has the worst crash in history? The probability of that happening is negligible, but what if?
So, if fear is holding you back, go with an. Do what feels easier for you.
In the long run, what will really matter is that you did in factand stayed invested for the appropriate duration.
Check out the difference between sip and mutual funds