A strategy is proposed for investing a ₹50,000 bonus: first, place it in a liquid fund expected to grow at 6-7% annually; then, divide it into 10 monthly installments of ₹5,000 to be invested via SIP into stocks or mutual funds, thereby mitigating market timing risk and averaging over 10 months.
"Put that ₹50,000 in a liquid fund so that it grows at 6 to 7% on an average. Step two, divide the total amount into 10 parts. Withdraw that ₹5,000 every month. ... do an SIP of this ₹5,000. Invest in any stock or mutual fund. This way you will not be timing the market but will be able to absorb the fluctuations of 10 months."
