"Investing through the systematic route and diversifying across assets is the best way to deal with market volatility and benefit from it," says Anand Radhakrishnan, CIO, Franklin Equity, Franklin Templeton Investment-India. When you plan to invest as a lump-sum investing, it is important to get the timing right or else the losses can be huge. A slow and steady SIP investing would have less damage. Most often those who invested through SIPs during market peaks are better placed than those who invested lump sums.

It was in 2008, when for the first time the Sensex crossed the 20,000 mark and many people who invested lump sums during the period could still not recover from their losses despite the Sensex being at an all-time high now. But on the other hand the SIP investors are sitting pretty. In case of a lump sum investment, 28 percent funds are still in the negative territory. The worst performing, JM Basic, is still 63 percent down from its 2008 level. Its SIP returns are close to 2 percent.

SIP is also about convenience. "Its key benefit is that it removes emotional biases from investment decisions through discipline and convenience," said Manoj Nagpal, CEO, Outlook Asia Capital. Don’t conclude by thinking that SIP is just the best way of achieving good returns.  It has its limitations as well. In simple words the cost of buying an asset is averaged out. As markets fall, the same amount fetches you more units.