Are Lump Sum Investments Riskier than Systematic Investment Plans? Some Empirical Evidence
10 Pages Posted: 19 Oct 2013 Last revised: 31 Jan 2014
Date Written: October 17, 2013
The asset management industry has marketed for years this idea of "disciplined investing" through Systematic Investment Plans (SIPs). Hence now there are numerous myths associated with SIPs. One of these myths is that a SIP is a successful prudent investment strategy that reduces risk avoiding market timing. But this idea has many opponents, that strongly support the concept of Lump Sum Investments (LSIs). The aim of this short paper is to compare SIPs and LSIs, focusing on the downside risk (without forgetting profitability) of these two popular strategies.
Keywords: Investment strategies, Systematic Investment Plan, downside risk, block-bootstrap
JEL Classification: G11, G10, D31, G00
Suggested Citation: Suggested Citation