Seeing the volatile nature of markets, most investors always speculate or are skeptical about the best time to invest. Also, due to lack of proper knowledge, the general investor sentiment is to invest when the market is higher and sell when they are lower, which is exactly what needs to be avoided.
Rupee Cost Averaging is an investment technique applied to regular fixed installments in a mutual fund scheme. It helps an investor to minimize the guessing game since a fixed amount of money is invested in the market at regular intervals, irrespective of nature. This helps in accumulating more units when the market is low and lesser units when it is high and as a result, the average cost per unit over the long term remains less. This is a beneficial approach as compared to lump sum, over the longer term.