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Writer's pictureMahendra Rao

When is the best time to Invest?

In Investing, timing is nothing, but time is everything

Well, this question has the strike to many of us and many times and has only delayed our investments.

Yesterday, was actually the best time for you to start your investment. A little delay in starting your investment will cost you the extra returns on your portfolio of investment. Don’t worry about what will go right or what will go wrong. Just Start.


Don’t Waste Time

Wasting time seating on side line’s and just observing the markets going up and down and worrying too much will not help and will only kill your returns. The sooner the better. Equity over a period of time has proven to be the best asset class of investment giving the best returns beating Real Estate and Gold as an asset class. As said always try to match your investment horizon with your investment choice. This will help you eliminate unwanted choices, and identify the right ones.


When will you need the money?

Basic for any investment is when will you need the money. Will you require the invested amount say after three years or five years or maybe more than five years? Are you making an investment for short term goals like Dream Vacation, Dream Car, School Fees, etc to be achieved or long term goals like Child’s Education, Dream Home, Retirement, etc? As said always try to match your investment horizon with your investment choice. This will help you eliminate unwanted choices, and identify the right ones.




When You Should Sell?

Once that you’ve decided to buy and invest, the next question arises when should you sell your investment? If you have invested in bonds, NCDs, Fixed Deposit or Debt Funds those will come with maturity. So, no need to worry in that case. Debt Funds are Duration based too. In case of Equity no need to jump ship every now and then. Some investors tend to believe that “They can Time The Market Well” predicting the time when the market will rise and fall. Unfortunately, if investing would have been that easy, they would have been enjoying their time on some exotic island rather than trying to sell their buy and sell theory to other investors.

When any business seems overvalued or some constraint is seen in the business of the company rising due to market competition or change in technology which puts company’s sales in jeopardizing one should execute their rights to sell and enter new business with good valuation.

An actively managed fund, you’ve entrusted your cash to a professional manager. If that managers abandon your fund to join another, and his or her replacement may or may not manage the same funds with the same skill and you may want to consider selling it. Otherwise, a few months of poor performance is not the reason to sell a fund.

Two Major warning signs may suggest a good time to sell:

1. The Business Fundamental Change

2. The Stocks becomes over Valued

These two marks the Red Flags to sell the stocks rest any other noise in the market can be safely ignored.


Don’t Listen to the noise

Avoid the terms you keep hearing in the media or through some colleagues or friends. The Market looks bullish? The market is Volatile? Markets have hit the bottom! Markets have crossed xyz mark!

Some investors, particularly those keen on technical analysis, study the ups and downs of market graphs to gauge whether the investors will take the markets higher, For others is just a futile exercise. Whatever the market is doing buy-and-hold is the best strategy to earn in the long term.


Keep Reviewing

However small the amount, keep reviewing your portfolio every alternate month or at least quarterly. Investments need regular care and attention to flourish. Reviewing your portfolio on regularly in initial stage help you to rectify any mistake made and make any changes required, earlier rather later. While you should not get glued to computers or mobile apps tracking it minute by minute it is also advisable not to avoid them completely either.


Taking the first step is difficult. Don’t be hesitant to take that step and avoid investing in equity and debt. Start Small Start Early. Learn through the process. Make mistakes, learn from the mistakes and create a portfolio which will give good returns basis your goals and time horizon investment. Go at your own pace, take a break when it's too much, and enjoy learning about the Foolish world of investing.




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