Smaart Investments

21/07/2026

18/07/2026

Rupee-cost averaging

Definition : Rupee Cost Averaging is the technique of investment in which a fixed sum is
invested to purchase securities at a regular interval irrespective of the price. There are two
broad ways of investing funds: one by way of one time lump sum amount and another by
way of systematic investment (recurring or SIP). In case of one-time investment, the cost of
investment remains the same till it is sold. In case of systematic investment, a specific
amount is invested regularly at frequent intervals irrespective of market price changes. This
type of investment strategy helps average the cost of total investment and is known as
Rupee Cost Averaging. The frequency of the investment can be daily, weekly, monthly,
quarterly etc.
Explanation: : Rupee Cost Averaging is important because predicting the market
movement is very difficult. Investors find it difficult to decide the right time to enter or exit the
market. Lay investors who are driven by market sentiments tend to invest when the overall
market goes up and sell during market downturn. As a result, often they end up buying at a
higher price and selling at a lower price. Thus, a prudent strategy for an investor is to set
financial goals and continuously invest at regular intervals without bothering about market
conditions. The Rupee Cost Averaging helps investors to buy more units/shares when
prices are falling and less when prices are rising. This strategy of investment is particularly
useful in equity-related mutual fund schemes because systematic investment neutralises
the impact of short-term price fluctuations in the market.
Name: Sachiin Saambrekar
Firm Name: Smaart Investment
Mobile: 9483675000
Email: [email protected]
Website URL: www.smartinvestmentguru.com
Mutual Funds: AMFI Registered Mutual Fund Distributor
ARN Number: 5795