Is it the right time to invest in the Stock market ?

So, Sensex and Nifty made fresh all-time highs recently. The Nifty managed to not only hit the 12000 mark for the first time ever and while Sense comfortably attained the mark of 40000.

Those who have already invested in the market are bearing the sweet fruit. However, for the beginners, the situation is very much confusing. They are consumed with the dilemma whether is it the right time to invest in the Indian market and should they start investing or should they wait.

Also, same is the dilemma with the investors who are looking to invest further in the stock markets.

In this post, we will be answering the question of Is there a right time to invest in the stock market and if yes, what is the right time to invest in the share market? So, let us get started.

Is it the right time to invest?

This question is often asked when the market makes a new high or a new low. When the market is high people would want to wait for the market to make a downturn again. However, when the market is low they would hope for it go down further. In both of these situations, people are always confused whether is it the right time to invest or not.

What they forget is that bull and bear both are an integral part of the market which can't be separated from the market for long. Nevertheless, when there is no movement in market people again tend to complain that it is a dead market and hence not the right time to invest.

Can you time the market?

Buy the stock at the lowest price and selling it at the highest is a myth. Even for the big investors, timing the market precisely and constantly isn't possible. They might take some calls that can hit the bullseye at some or most of their stock but doing it every single time isn't possible. What most of these investors do is to fix the buying and selling zone and not the precise points. 

In other words, you won't be able to time the market and hence will never be able to find the right time to enter the market. So, best-suited advice is to get started today. Start small and eventually increase your investment and when the valuations are low.

Focus on spending more time in the market rather than timing the market.

It is not a secret anymore that spending more time in the market is more important rather than timing the market. An investment held for the long term can build you the fortune. As you stay invested in the market for the long term, the power of compounding works in your favor. Also, if you try to time the market and aims to buy the stock at the lowest prices chances are you will miss the best days of your compounding or you might never make the investment.

Don't chase the market, look for the individual investments. 

Unless you are investing in the index fund, it doesn't matter much whether the market is up or down

There are more than thousands of companies listed on the stock market and not necessarily all of these will be doing good in the bullish market. Similarly, not necessarily all of them will be going down in the bearish market. If you keep looking for the good companies which are trading at discount and are fundamentally strong you will eventually get the good ones.

In other words, rather than chasing the market track individual stock and keep a track of its prices. 

Averaging is your best friend 

So hopefully, we have consented that timing the market and purchasing the investment at a rock bottom price and selling it at the topmost price is almost impossible. However, you can do it you get lucky sometimes but why to leave your fortune to luck when you can work for it smartly. 

The smart approach here will be to go for the cost averaging. If you are not sure is it the right time to enter the market and whether the market will go up or down. The best move will be to start investing in small portion and then eventually start investing periodically. Add more stocks or units every week or month when price moves significantly. 

For example, if you are planning to make an investment of Rs 20k, then do not invest all at once if the market is uncertain. The averaging approach suggests investing 20% of 20k i.e. Rs 4k right now. Add more stocks in the same proportion when the price goes down or up after a regular interval. Following the Rupee Cost Averaging approach will help you avoid the technicalities of timing the market exactly.

If you are a mutual fund investor your best approach in such cases is to invest through the Systematic Transfer Plan (STP) or Systematic Investment Plan (SIP) mode. Moreover, instead of going to the traditional SIPs you can opt for the updated versions of SIPs like- Value Trigger or value Averaging SIPs.