SIP is a method of investing where you allocate a fixed amount regularly (montly, quarterly) towards any asset. It works on the principle that when the price of the asset falls, you get more units, but when the price of the asset rises you get fewer units. So you end up buying more units at a lower price and fewer units at a higher price, thereby averaging your cost efficiently. SIP works best in a volatile market, over a longer term. However, if the market continously rises, a lumpsum investment delivers better returns.
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SIP is about rupee cost averaging.. http://outlookmoney.com/scripts/IIH021C1.ASP?SectionID=10&Cat egoryID=3&ArticleID=4601&search=Y&SecID=0&SearchF or=1&txtSearch=Sheetal+Mehta
Read teh artcile it will help u understand benefits of SIP and how it elps