The Indian stock market has been scaling new heights in recent times while also becoming volatile at times, leaving a majority of the retail investors in a conundrum. A question often asked is whether they should stop their systematic investment plans (SIPs) to avoid potential losses at the peak. While the temptation to time the market and protect your hard-earned savings is understandable, stopping your SIP at a market high can be a costly mistake for several reasons. Just ask yourself a question: Have you invested or started investing when the market was at its lowest point?
If the answer is yes, then ask yourself another question: Did it fall again from your entry level? If yes, then your calculations regarding the market were wrong. So, why think about trying to time the market and press the pause button on the SIP, assuming it will fall? The market gains when it has strength and falls when it has weakness. Therefore, selling or taking a pause on the SIP when the market has good strength is probably not a good choice. SIP involves investors making regular, automated contributions to mutual funds at set intervals.
The primary goal of SIP is to benefit from the rupee-cost averaging, which means purchasing more units when the prices are low and fewer units when the prices are high. Another significant facet of SIPs, as implied by the name, is their systematic nature. SIPs are designed to offer a consistent and disciplined method for making investments. The current market level is higher relative to the historical levels. Looking ahead, there is potential for further significant growth. To benefit out of this movement, it’s crucial to maintain a long-term perspective, exercising both patience and persistence in your investment approach.
Denne historien er fra January 01, 2024-utgaven av Dalal Street Investment Journal.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra January 01, 2024-utgaven av Dalal Street Investment Journal.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
How To Invest In An Ageing Bull Market
Bull rallies (periods when stock prices rise) and bear declines (periods when stock prices fall) are natural parts of stock market cycles, but they don't follow a fixed timeline.
Should You Entrust All Your Money To A Single AMC?
If you are a market participant, you have probably heard the quote 'don't put all your eggs in one basket', which suggests diversification. Investors often focus on diversifying across categories like large-cap, mid-cap and small-cap, but they may unintentionally overlook diversification across different AMCs. The question arises: is AMC-wise diversification really necessary? Rakesh Deshmukh takes a closer look at this scenario
Wild Swings Engulf Global Equities
U.S. stock markets experienced significant volatility. An early-week rally pushed the markets to new highs, but this momentum faded, primarily due to weaknesses in the tech sector. The major indices had a mixed finish with, S&P 500 and Nasdaq closed lower, while the Dow recorded a notable gain.
U.S. Elections and China's Economy Hamper Commodities
Commodity markets experienced selling pressure in the last fortnight, driven by uncertainties surrounding the upcoming U.S. presidential elections, concerns about the Chinese economy, and increased agricultural production in Brazil.
Wealth Building For Retirement Through Mutual Funds
Retirement is one of the most crucial and lifechanging phases. It marks a period where maintaining your lifestyle becomes paramount even though your regular income stops.
Mastering Investment with Information Ratio
Information Ratio helps in navigating the complexities of the investment landscape by assessing an active fund manager's performance. And though it has its limitations, it remains an essential part of the finance industry. The article explains what Information Ratio is and how investors can use it as another tool
Plan To Be Financially Independent
Each of us aspires to be financially independent as it ensures having enough resources to be self-sufficient and control our finances.
❝Technology is the new game-changer"
With a new breed of young investors entering the financial markets, it is the use of technology that is increasingly playing a major role in how investments are done and tracked. Anand Radhakrishnan, Managing Director, Sundaram Mutual Fund, shares his opinion about how this factor is turning into a significant tool and how it will shape the strategies of his company
What If Donald Trumps?
The potential election of Donald Trump as president in the U.S. carries significant implications for the Indian equity market. It could lead to changes in the global trade dynamics, in particular affecting the Indian IT sector while also raising inflation levels and leading to yet another revision in the visa programme for Indians who want to work in the US. The article takes a closer look at what may lie in store
Sectoral Gains Make A Mark
Benchmark indices continued their uptrend, reaching new record highs, although the pace has slowed as the broader markets faced selling pressures
