Nifty breaks record & is reaching new heights but as the experts say there is no right time to invest in market.
Today when we are reading this article the SENSEX & NIFTY is breaking all record & reaches all-time high. At the time of writing, this article SENSEX was at 32k plus and NIFTY was at its high of 10k plus. The average yield for three years was whopping 25 percent for nifty.
Experts say – Nifty may touch 11k by end of 2017
As Nifty touches 10k & many of us might think that the market is overheated and valuations are stretched in the current scenario. In its latest report, HSBC predicts India to be the third largest economy on the globe beating Japan and Germany. By 2028, India’s GDP is estimated to be USD 7 trillion from present USD 2.3 trillion according to HSBC report. Many trade analyst also beleive that nifty will accelerate further & will break 11k barrier by end of 2017.
Now the question arises….is this the right time to invest or one should wait for some correction to happen!
A look at the government spending in various sectors and policy changes indicates that we can prove HSBC report to be true in future.
There is a saying that – it’s always the right time to invest in stock market but the timing has to be right. If you understand the true meaning of above statement, then the market is always ready to make you rich.
Yet, if you don’t trust the current market valuation and don’t want to invest your lump-sum wealth in one go, you should choose the ‘SIP’ route offered by all mutual fund houses. If you are spending for long-term through Systematic Investment Plans (SIP), i.e. investing a small amount at regular intervals for a number of years, your investments will gain the benefit of rupee cost averaging. This will always give you an upper hand in the market and will remove the concern caused by the volatility, i.e. the market swings caused by high liquidity in the market.
REMEMBER- stick to the long-term plan even if the market goes down 50%. That’s how the magic of compounding (the eighth wonder according to Albert Einstein) will make to rich.
If you understand the market and growth story of a company, then it’s never too late to invest in the market. There were always fast moving stocks (Example – Graphite India, Vakrangee, etc.), turn around stories (example – Ashok Leyland) and much more which gave an excellent result in past few years. So, if you are able to pick them up on right time then you always make money.
If you are skeptical in you approach, then let the masters of the field do their job and chose the mutual fund to appreciate your wealth depending on your risk appetite.
In case you need money for your household expenses in near term then it’s better to stay away from the market as of now or pull back your invested money and park them in debt fund or the liquid fund.
Being good investor always chose long term as approach and invest in companies who have good growth story and future expansion plans managed on good governance ethics. Yes, markets can really test your patience and that is the key to investment. Of course, a prudently-chosen diversified portfolio will hardly go wrong.
Hence, it is ideal for an average investor to stay diversified and focus on his/her asset allocation. At times, when you anticipate that markets have gone up, split your investments in smaller proportions or tranches, but ensure that you invest and not pause after a while. Over a period of time, markets will keep rising with the progression in earnings of the corporate sector. There could be longer waiting periods, but ultimately, the markets will reflect the earnings.