Hello,
I am new to Zerodha & having the basic knowledge of trading/mutual funds.
I am having a confusion. While investing in ELSS funds for tax saving purpose whether it will be better to invest in SIP or should I do it in lump sum amount? Which among these two will be better?
Going the SIP route is always the better way for long-term wealth accumulation, whether ELSS or not. There are many articles online to give more insight on this, start here and look for more.
2 Likes
Going for an ELSS is good if you want to save tax. But for a long-term investment plan, I think you must have a SIP.
Keep aside a part of the money intended for mutual funds every month, either in a liquid fund or a money manager fund. And continue with your SIPs. Because SIPs are the kings of compounding and averaging. But a wise man will also make a lumpsum purchase along with his running SIPs whenever there is a big market fall. This gives you a much better average. Use the funds kept aside in the money manager funds to make this lumpsum purchase. Ofcourse, this requires you to be proactive and follow the markets a bit. But in the case of SIP, it will completely do the job for you.