Is Lumpsum the best way to invest in mutual funds?

Shubham  on 03 April 2019


Inculcating quality habits is the way to live life. Good habits bring a sense of discipline and routine. Investment is one such habit that people should instill in their life. The Bank isn't a tree and your savings aren't growing. But what if they could grow? Future is full of uncertainties but investing could be the ultimate hack to beat the unpredictability of life. A good way to manage money is by investing which guarantees your future and present financial security. This way you not only have more wealth in your account but you also end up with another stream of income. This is two value offer which provides you with growing wealth and passive earnings.

You might have heard about lumpsum investments in mutual funds but aren't sure if that will work out for you. Let's premortem lump sump before you start investing.

Lumpsum investment is fundamentally investing the entire amount of money at one go. If you are an investor with a huge amount of disposable wealth lying at your hand that you wish to invest in mutual funds and have a high-risk tolerance, you may opt for a lump sum investment. It is played by big players and investors who are looking for a long term investment. It is one of the most lucrative ways of investing with better returns. If you are wondering how is lumpsum investment calculated, you should know it is not rocket science. There is mutual fund lump sum calculator which can help you calculate your returns. 

Mutual funds investment in India has become much easier due to the evolution of the digital world. There are many online fund managing company which can help you invest in best mutual funds for lump sum investment. There are online mutual funds investment companies like Finpeg that can help you select a scheme by taking into consideration your risk appetite and financial goals. Now that you are done selecting a scheme, lumpsum return calculator comes in action! The intent of this calculator is to help you calculate the returns you would get at an assumed compounded rate, for the desired period of time.

Due to the rapid escalation in the growth of mutual fund schemes in India over the years, it resulted in the ever-changing list of best performing mutual funds in the market. Some of the best performing mutual funds are- Reliance Large Cap Fund, JM Core 11 Fund, ICICI Prudential Bluechip, Indiabulls Blue Chip Fund and more. Before investing you should check the past performances of the equity or debt fund and invest after consulting with a fund manager.

The lump sum investment could be a good way to invest in mutual funds if your portfolio allows you to. The other way of investing in mutual funds is SIP (systematic investment planning) where you invest a fixed amount of wealth throughout a period of time. SIP is a safe option for people who have a lower risk tolerance but it generates low returns. Whereas lumpsum includes risk but it gives you high returns. If you are well versed with the ups and downs of the unstable market and are ready to earn huge wealth, then lump sum investment could be fruitful to you.

The author is an MBA from IIM Bangalore, preceded by B.Tech (Computer Science) from IIT Kanpur


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