Indian Market at all time high
Nifty recently crossed 11500 for first time ever and as of today is trading above 11600. Similarly, Sensex is trading above 38500.
If you invested anytime in last one year, in well selected stocks, then you must be enjoying the current times. The issue is with newbie who wants to start investing in the stock market. They are getting confusing opinions.
One side is saying that they should wait for correction to invest. The other side is talking about looking for good stocks or mutual funds and invest right away.
So what should you do? Let’s find out.
Nifty/Sensex is at all time high, Should I wait or invest now?
Or Is it right time to invest in stock market ?
Whenever market makes new high and then keeps going up, this is the most frequently asked question. Especially those who feel left out of recent bull market and lost opportunities.
This cycle is on going. Like people asking should they sell their investments if market corrects. So what to do? What are the factors you should keep in mind while investing?
There is no right time to invest or timing the market
When it is mentioned that market is at all time high, it refers to the value of index. Which in case of Indian stock market is Nifty and Sensex.
These index do represent overall market sentiment, but they don’t refer to inherent value of any single company. Even Sensex is a very narrow representation of 30 stocks only.
Which means, when you are looking for investment and then you see at index movement for judging the investment timing then you are looking at wrong indicator.
It’s like looking at traffic condition of whole city, when all you need to do is travel to market nearby. Traffic situation doesn’t matter when you are travelling within your own residential area.
Similarly, when you are planning to invest, you should look at the company in whose shares you are investing in. If their is potential of growth, then you invest. In case of mutual fund, there is slight change, but the process remains more or less same.
Research the company and then invest gradually
Here, two things are important and what you should keep in mind.
One, researching the right company to invest in is more important. As an investor, you should focus on due diligence on researching the company & evaluate it’s future potential. That is ‘the’ criteria of selecting a company for investment.
Secondly, don’t invest in one go. It makes sense to invest gradually in a company. This way, even if the stock comes down due to market sentiments but still holds good fundamentals, then you can have your cost of purchasing the shares to more favourable price.
Caution: If a company’s stock prices are coming down, keep an eye on its financial, market size and related criteria. Sometimes, rather then adding the shares, you are supposed to exit that investment.
Turn off the alert which tells you about where Nifty/Sensex has reached. Rather start looking for how to find a good investment opportunity.
More time you invest in finding good investments, better will be your return over time. Considering all the analysts prediction and how many of them turned out to be right, the approach will be to educate yourself and do your own due diligence before you invest.
Besides, when you know whey you invested in any company, then it is easy to know when is the good time to book profits or exit from that company.
And here is the happy cat for those who are enjoying the current sweet ride of market.
tags: investing in stock market, investing for long term, fundamental analysis.
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