Should I invest a lumpsum or via SIP in mutual funds?


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I am planning to invest Rs 5,000 every month. Should I go for an SIP or a lumpsum investment? I am planning to invest in DSP BalckRock Equity Fund. Is it okay to go ahead? If not, please suggest the best scheme?
— Mahesh Ch

Dinesh Rohira, founder & CEO,, responds: 

Although you have identified the amount you want to invest along with the investment frequency, there is no clear indication on the tenure of your investment. Defining an investment tenure will ensure suitable selection of schemes in your portfolio. It will also enable the investor to follow a goal-oriented approach.

Given the volatility in the market, it is better to go for an SIP. This will inculcate discipline in your investment, irrespective of the market condition. A lumpsum investment will attempt to time the market, which will be difficult for a first-time investor and it will also create a psychological barrier.

I will not advise you to invest in DSP BlackRock Equity Fund, which is underperforming its peers as well as the benchmark over a period. If you have a long-term investment horizon of more than five years, you can invest in the following schemes:
SBI Bluechip Fund – Growth: Rs 2,500


Written by Loknath Das