Avoid These Dilemmas While Investing In Equities

The stock markets in India have been performing well for some time now.

While the general feeling is that investors usually make haphazard decisions during market downturns, the fact is that even rising markets can test the resolve of investors. Their not-so-pleasant experiences of the past of seeing their gains vanish after a good run in the market often makes them nervous after future prospects of the market. Hence, it is important for investors to keep their focus on their goals and avoid making abrupt changes to their portfolio and investment strategy. Here are some of the dilemmas faced by investors and how these need to tackled by them:

Why not exit now and re-enter when the markets go down? 

Although there is a always a possibility of a correction in the market, it pays to stay invested as the investors who stay committed to their defined time horizon get handsome rewards in the long run. That's because over the longer term volatility tends to work itself out due to offsetting of bad years against good years. Timing the market can be a futile exercise as it is very difficult, if not impossible, to predict short term market movements with perfection.

Will a goal-based investment approach help me stay invested?