What is opportunity loss?

Opportunity loss is a loss that occurs when you fail or unable to pay at the right time and the market shows a better return. Let’s consider an example of a Mutual Fund (MF) or a Systematic Investment Plan (SIP) where you are making regular payments to achieve your investment goals.

Assume in a month you missed or unable to make the payment.

So the month in which you failed to make such payment was the month in which the market has shown a good return then you faced an opportunity loss where your missed installment may have earned a good return by opportunity you just missed, this is an opportunity loss.

Once you invest in the scheme like Mutual Funds, SIP, ULIP, etc. this is the most common term which we see and use.

If you’ve been paying premiums regularly, there is no opportunity loss, and if the market grows you’ll have all the opportunity gain. So make sure you never miss any payments to avoid any opportunity loss.

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