SIP promotes a disciplined approach to investing. Further, one of the key advantages of SIP is the concept of rupee cost averaging. Since investors contribute a fixed amount at regular intervals, they buy more units when prices are lower (markets fall) and fewer units when prices are higher (markets on high). Over time, this can result in a lower average cost per unit.
Additionally, long-term SIPs harness the power of compounding. The returns generated on the invested amount are reinvested, leading to potential exponential growth over an extended period. The longer the investment horizon, the greater the impact of compounding.