Fixed instalments can buy more units when prices dip and fewer when they rise. Here is the idea without overstating it as a guarantee of profit.
Rupee cost averaging is the effect of investing the same rupee amount repeatedly. High NAV means fewer units, and low NAV means more units. Over choppy markets, your average purchase cost can land between extremes. However, you still face overall portfolio risk.
Many investors find it easier to stay invested when they normalise volatility as part of the process. This is much better than treating it as a signal to panic after a single large entry.
If an asset consistently declines for years, averaging down still loses money in aggregate. Diversification, your investment horizon, and fund quality remain the most essential factors.
Disclaimer
This article is for general education. It does not recommend specific mutual funds or securities. Past performance does not guarantee future results. Consult a qualified professional before investing.
Model monthly SIP or one-time lumpsum growth with your own numbers, right in the browser.
More reads on SIP, mutual funds, and investing in India.