Ch.12 · Model Portfolios and Asset Allocation · medium
What is 'rupee cost averaging' and when does it work most effectively?
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EXPLANATION
Rupee cost averaging through SIPs buys more units when markets fall (NAV is low) and fewer when markets rise (NAV is high), reducing the average cost per unit over time. It works best in volatile markets with a long-term upward trend — it does not add value in consistently rising markets where lump sum would outperform.
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