Suppose I invest Rs2000 monthly in a mutual fund (growth option) for two years and someone else invests Rs48000 in the same fund at the same time I start investing. Who is going to have better return? I feel since NAV will generally increase with time, the second person gets more number of units since he buys at a cheaper rate and will get better return at the time of redemption (units bought at cheaper rate, sold at higher rate). Do you agree with this view?
Of course there may be small fluctuations in NAV but I think this is not too large to make SIP mode more profitable in the long run in a growing economy. I am confused about utility of SIP. What is your view?