The right price to invest or the right time to invest lump sum amount will give the best return if timed right: bought at lowest price and sold at highest price.
For that you would have to devote time to research the market in depth which may be difficult due to a hectic life. Also, one cannot predict the market. This is where SIP steps in to fight the 'timing the bug' and have regular investments despite a hectic life. SIP distributes the investments at various entry points, and thus helps you in fighting 'timing the market' bug.
Better returns?
It is not necessary that SIP always gives better returns than lump sum investments.
In fact as seen earlier, in a rising market lump sum investments give better profits. If timed right lump sum investments can give the best returns. As it is difficult to time the market we adopt the SIP strategy to be on the safer side. Also, it is not necessary that if an individual has lump sum amount s/he should still adopt the SIP way. Select the right fund, keeping her/ his goal and investment horizon in mind.
Also read: Inflation pinching: 'Can't afford movies now'
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