Udayan Mukherjee, Consulting Editor of CNBC TV18, discusses the importance of timing the market in maximising returns.
Investors looking to book profits in the short-term may be taking a shot in the dark. The adage to insulate your investment from risk is that, time spent in the market is more important than timing the market. Smart investors reap the benefits of compounding and negate the short-term losses accrued through a change in the market cycle, by holding out till the storm subsides.
Entry and exit points should not be conflated with timing.
It is also important to identify whether the price of a stock is attractive relative to the company's valuation. In the course of time, the market will go through multiple peaks and trough, and the best way to multiply your earnings is to be an investor, and not a trader. The best returns come from holding through bull and bear cycles.