I am wondering whether it’s a good time to put money in the stock market or just to keep up with my regular savings.
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I am wondering whether it’s a good time to put money in the stock market or just to keep up with my regular savings.
I don’t think timing the market is the right way to approach investing. Your focus should be more on what to invest in, rather than when. Stocks are investments that can only be truly appreciated when you look at it from a long-term perspective. If you look at anything on a daily or monthly or even yearly basis, it is bound to be volatile. Volatility is the nature of equity markets. My advice will be to look at entering the stock markets when opportunities present themselves, rather than focusing on significant dates or times. The task is the bet on the future potential of a company, based on historical and present-day data. So, the simpler and in many, a sense better way to approach investing in stocks is to take out time to do your own homework and build knowledge about the investment. Equities allow you to take advantage of the power of compounding, which grows your wealth exponentially. So, I would suggest, instead of focusing on getting your timing right, which is nearly an impossible task, focus on choosing good quality stocks, and then stay invested at least for a period of 10-15 years. In that way, you will have a higher chance of being successful.
Best time to get invested in stock markets is when the markets are low enough.
The question is – How can you ever know that? How can you be sure that the markets won’t go lower after you get invested? How can you be sure that the markets won’t go higher after you have have decided to wait? Well, you can’t figure that out most of the times. So most of the times the right time to get started with the markets is today— right away. However, there are precautions to be taken if you are thinking of building your portfolio from scratch. If your portfolio will get built out of your regular monthly savings then no issue at all because it gets very easy. All you need to do is to decide what proportion of your monthly savings must go into equity and you just get started in the right manner. For most of the retail investors equity mutual funds are the way to go. If you can pick good stocks on own then may be you can do it on your own too – but be very sure that you actually can pick good stocks and track them, do not be in illusion, because a lot of retail investors waste years and years in the markets due to this illusion alone. However, if you have good amount in hand to invest and get started with, and want to build your initial portfolio with that amount then do not invest it at once. Park it in a liquid fund first or in something considered reasonably safe. And then every month take out some money from that and invest it in equity markets – do it over 6–18 months depending on how big is your corpus. This way you get to buy at all levels. If the markets were at relatively higher levels when you started then over the next 6–18 months you will automatically get a chance to invest at lower levels too as markets always correct from higher levels. This approach is safer than pumping all your money at once based on your intuition or bravery. Do not be brave in markets. Be disciplined and patient.