Markets are volatile and average investors are getting conflicting views from experts â€“ some ask them to stay away from the market and some ask them to bet their networth on stocks. But the factors that decide if you should be biting the bullet are altogether different.
International Money Matters
When is a good time to invest? "Now" is the prompt answer you get from any advisor. Well, if the advisor is cheeky, you might get a "yesterday" too. With the markets being so volatile, is it really a good time to invest, is it time to stay invested or is it time to pack your bags and run? I have a couple of arguments, before you reach either of the answers above. Hear me out and then decide the best course for yourself.
1. First step is investing: While investing, don't be in a rush to invest- we generally are in a hurry to take action, be it invest or exit. Why? Let's sit on the sidelines for a minute and take stock of where we want to invest, for how long. Invest in good companies, good businesses and invest in them for the long run. Remember, an overnight success takes 20 years, why should you give your companies any less time?
2. Keep an eye: As much as you should stay invested, keep an eye on the companies you have invested in. How is the business doing, has the environment changed, how has your company coped, what is the management doing, how stable is the business, which direction is it moving. If you don't know answers to these, ask the company or your advisor as the case may be. Action if warranted should be taken based on what the company is doing rather than how the market is doing.
3. Markets are markets: They will do what they do best, move up and down. You should do what you do best- your business! So, you can earn more and invest more. Don't get swayed by all the noise around you. Right now, we hear 2 noises- Markets are down- exit and markets are down- invest. No single action is correct for everyone. If you are investing for the long run - read 5 years and more, it is a good time to invest, but in a staggered manner- you will never be able to time the markets and you should not attempt to. Invest regularly irrespective of where the markets are going, if your tenure is long term and your asset allocation and goals permit, that is where you should be. If not, then even if the market is at the lowest point, you should not be investing (if your risk profile doesn't agree with this and if your tenure is short term).
Markets cannot be your guiding factor, let your goals be your torch and guide you towards action.
So, while do keep your eyes and ears open if you can stay away from the "action" oriented mindset and can take well thought out decisions; if not it just might be a good time to take a holiday from all the market related news.