When to invest into the market? Is the market peaking? Is the market going to go up or down? You ask any investor worth his salt and he will have a prediction on these issues.

People try and decide their investment strategy based on this prediction. It has a certain romance to it as one tries to outsmart the markets.

 Unfortunately for the majority (especially the retail investor) the market will outsmart them. The best ways of optimizing returns in the market is not trying to outsmart it but to have faith in historical data.

 If we see the trends the market has always gone higher over a prolonged period of time while oscillating over shorter time durations.

For example if one look at the Indian equity markets.

  - Over 1 year period it has given negative return more than 5 times

  - Over 5 year period it has given negative return only once

  - Over a 10 year period it has never given a negative return.

 The average return over last 29 years is upwards of 15 %. This return will typically be the growth in the index based companies and inflation put together. Also the swing over these periods would be highest for 1 year and lowest for 10 years.

 In order to capture this trend the best albeit boring methodology of investment is to invest through a systematic investment plan (SIP) - One invests a specific sum monthly over a prolonged tenor.

 This enables the investor to put in money when the market is high or low. What it also does is he will be able to buy more when the market is low and less when the market is high. As the investor does not change the amount of money, this automatically brings down the mean average purchase price below the mean of the market. This fact coupled with the fact that the market over a longer period of time has always gone up ensures a relatively safe optimization of return.

 There are various investment options that can be used for SIP.

-   One can go for any good mutual fund scheme with proven track record for this kind of investment methodology.

-   One can use the Unit linked life Insurance policies (ULIP) in monthly mode to combine the benefits of SIP and the tax benefits of insurance policy.

-   One can also use the Equity Linked Savings Scheme(ELSS)  to combine tax benefits and optimization thru SIP.