Community//

With the Market Rise, Is It A Good Time To Invest?

A large majority of investors prefer to choose a few particular markets where they can park their funds in systematic investments on a monthly basis.

investment

They do not get swayed by the volatility of the bourses. Instead, they like to tell themselves that they are in it for the long term. But smart investors would always prefer to do their trading in Blockchain or in any other progressive market themselves and get the best returns possible. There are a number of low-cost booking portals which help with that.

What Cues Should You Pick from the Market?

For those who like to do their own trading instead of sticking to a fund house, keeping tabs on the market is very important. The stocks to pick should have the best (lowest) value when the investor enters the stock. This means that a sustained period of selling on that stock would be a good time to consider it.

At the same time, rock bottom valuations of a stock should not the only criteria. Before initiating trading on low-value stocks, it is important to under the difference between and value of the stock and its price. A stock that is low might not have very good intrinsic value. That is why only low prices shouldn’t be the only criteria for judging a stock.

The Fallacy of Timing the Market

The returns on your investment do not only depend on entering your stocks at low prices. The key is also to offload at the right time. The usual trap falls into when the markets begin to rise is to become greedy. If a stock has risen strongly, you shouldn’t try to forecast the absolute peak at which you should sell. The best principle is to give yourself a target growth. When the particular stock has hit that percentage of growth, you should cash in your profits.

A Few Undeniable Truths

When you are looking to handle your own portfolio of stocks, there are some principles that always help keep the perspective. Let us look at some basic principles to decide the best time to invest when you are trading in stocks.

  • Markets historically rise over time. Unless you are a day trader or you need some cash urgently, the longer you can stick to a stock, the better your returns would be. The only time this principle doesn’t work is when something goes seriously wrong with the company. In that case, you should exit as quickly as possible.
  • Across the world, traditional investment instruments with banks are seeing a reducing interest regime. Parallelly, there is rising inflation as well. Investing in stocks is a sure shot way to ensure that the returns outweigh the rate of inflation.
  • Investors often fall in love with stocks. While it’s good to have a few favorites, yet one must be willing to let go when it is time. That helps to maximize profits and/or minimize losses.
  • Many investors come into the stock market with very unrealistic expectations. This is not a get-rich-quick scheme where you get returns several times your investments within a short period of time. High double-digit percentages of returns are more the exception than the norm.

Final Thoughts:

Like we said earlier, it is not a great idea to try to time the market. When you are looking for a good time to enter the market, do not go just by market sentiments you hear or read about. Get into the fundamentals of the scrips you are eyeing, and when you see them at the most attractive valuations, go for them. When you enter the market at the most opportune time and exit when you have hit your targets, you stand the best chance of attractive returns.

The Thrive Global Community welcomes voices from many spheres. We publish pieces written by outside contributors with a wide range of opinions, which don’t necessarily reflect our own. Learn more or join us as a community member!
Share your comments below. Please read our commenting guidelines before posting. If you have a concern about a comment, report it here.

You might also like...

Community//

Proving Warren Buffett Right – Why Index Investing Works

by Sridhar Ramakrishnan
Community//

Smart ways to invest your money in 2018 and near future

by Ankit S.Maharishi

Sign up for the Thrive Global newsletter

Will be used in accordance with our privacy policy.

Thrive Global
People look for retreats for themselves, in the country, by the coast, or in the hills . . . There is nowhere that a person can find a more peaceful and trouble-free retreat than in his own mind. . . . So constantly give yourself this retreat, and renew yourself.

- MARCUS AURELIUS

We use cookies on our site to give you the best experience possible. By continuing to browse the site, you agree to this use. For more information on how we use cookies, see our Privacy Policy.