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LUMPSUM INVESTMENT IN MUTUAL FUND

A lumpsum investment in Mutual Fund is generally considered when the investor has a big corpus to invest – this could be the amount of money received after retirement, from the sale of a house, from an inheritance or it might be the case that one possess to accumulate in the bank-account and wish to invest it. A large sum of money can be invested in Mutual funds, on choosing to invest in lumpsum. As a result, as the market grows, the value of the investment will also grow parallely. When any person invests in Mutual fund in lumpsum, it means a single, bulk amount is locked into one-time Mutual fund investments.

On considering a lumpsum investment in Mutual fund, one can approach to a financial advisor to do it on be half or can contact the Asset-management company directly. Completing the prerequisties like filling up KYC form and submitting documents is essential to create Mutual fund account. Market is also a vital parameter to consider. Investing a Lumpsum amount when the market value is very high, can lead to significant portfolio devaluations in future. Instead, waiting for a more suitable market condition will be an intelligent step, when valuations are on lower side.  In the meantime, one could invest the money in a debt fund, a liquid fund or any other traditional savings options. Another route to take is to invest in a Systematic Transfer Plan (STP). Through an STP, one can easily invest the lumpsum money in a liquid or market fund, from where a fixed amount will get transferred to an equity fund every month. This is also similar to SIP, but one should also stand in chance to make returns from the initial lumpsum investment. As always, research should be done alongwith comparing various Mutual Fund schemes before investments. Before funneling in cash, liquidity requirements and investment goals should also be considered.

Lumpsum Mutual fund investments are the way to go for experienced investors with a high-risk tolerance and sizeable amount for investment. However, it would be best to reconsider this route if market fluctuations and a dip in portfolio valuations make anyone anxious.