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

Abstract

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

Zenti, Raffaele, Are Lump Sum Investments Riskier than Systematic Investment Plans? Some Empirical Evidence (October 17, 2013). Available at SSRN: https://ssrn.com/abstract=2341773 or http://dx.doi.org/10.2139/ssrn.2341773

Raffaele Zenti (Contact Author)

Advise Only ( email )

Via San Gregorio, 40
Milano, Milano 20121
Italy

HOME PAGE: http://www.adviseonly.com

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