Is It Good Time to Invest in Stocks?
The answer is so simple – If the stock is at its fair valuation, then of course, YES. But wait!
If it’s so simple, then why do most people lose money in stock market?
Because investing isn’t just about timing the market, it’s about valuations!
It is not that easy- assume buying cinema tickets for a blockbuster movie like Pushpa or Baahubali in the first few days of release. It’s too hard to get them or you have to pay some extra bucks to someone who already have it, because theatre capacity is limited. Meanwhile, for some other films, you can get easily and also at cheaper price.
You see- there is direct connection of demand and supply. More and more people want to buy some stock and as no. of total shares available for trade in market is limited the price tends to go up. Vice-versa, when people start selling then – CRASH!.
The myth of market Timing
It's really bad idea to time the market without proper knowledge and risk management. Stock price valuations depend on various factors like economic events (which can be global, local or even stock company-specific) and geo-political changes. You just can’t beat market every single time. Even if you got some insights of stock then those stock operators. I consider you have saw Harshad Mehta related movie and documentaries.
So, practically it’s really hard to time the market.
Then what to do?
Valuations: The True Key to Investing
Market participants come from every aspect of society, and their knowledge about stocks and the economy varies from person to person. The Zero to hero bait won’t work for you always. What work always is valuations.
Evaluating stock prices with technical or fundamental analysis or both can give you opportunity to accumulate stock at lower prices and then when market goes up your portfolio is green. You are the Hulk (the green boy).
You must consider current economic conditions and factor upcoming events while analysing valuations.
Don’t worry you don’t need to do all analysis by your own. There are can be general trends in India :
Festivals are major events for the stock market—people love to buy according to festival demand.
Cooling and fan-related stocks perform well just before summer.
Fertilizer stocks tend to rise before the monsoon season.
You just need to focus on what’s going on around you and what’s coming next.
Summary
Market will always work like roller-coaster so you just need to wait and watch and then action.
not every falling market means buying opportunity. It’s always about valuations and growth trajectory.
Well, in current market scenario, market have corrected but near-term growth looks uncertain. So, when clarity over sanctions and health of global as well as Indian economy comes into sight, start buying in tranches rather than investing all your capital at one price.