The Right Time to Invest in the Market

“The best time to plant a tree was twenty years ago, the second-best time is now.”- Chinese Proverb

While the proverb says about the importance of planting trees, it is relevance for the time of investing is no less. Like nurturing a seed to sampling to the tree is a very long term work, similarly, investment is a long term work as well. As the focus should be on the right nutrition and soil and manure you give rather than the timing of planting a seed. (Consider an all-season seed, for smooth Analogy). 

In the same way, the focus should be on the analysis of the company, choosing a company with good future prospects, and selecting securities best suited to individual capital needs and risk appetite. 

The timing of Selecting an investment that suits you well and has good prospects can never be perfect other than the day you find such a pick and have sufficient resources to be able to make such investment. To wait for the best time to invest in the stock market will be wasting one of the best opportunities for investing in the stock market, that is NOW. 

The greatest reason for having such a thought process is having a great obsession of retrospective thinking over the time to think that all the best time for investment opportunities has been gone and returns are absorbed and therefore the investment needs to be done in a very cautious manner with time being a prime factor for analysis.

For instance, an investor at the start of 2020, will regret not investing in the stock market when NIFTY was at 5000 levels, to miss the upswing it witnessed to teach 12000 in less than a decade. But the same situation would have been in the year 2010 as well. An investor would have taken the period of 2000-2010 into consideration when NIFTY jumped from 1500 levels to 5000 in 10 years and see that good opportunity are lost. 

If the investment was not made even then, the investor would not have gained great returns in this decade as well. Waiting for the best time to invest in the stock market just means you're missing out on potential returns in the meantime. Similarly, the situation stands for the current period as well. When thinking from a long-term perspective, the Economy like India is bound to show good growth, with certain sectors performing better than others and no doubt in the other 10 years. 

We see Index breaking other benchmark levels as well. The stock market doesn't move linearly, there is no innate pattern of movement of price levels and there are ups and downs and no one can say with certainty which way it will go next. Its path is even more unpredictable during an emotionally charged economic crisis. The focus should be on Identifying the companies with greater profit potential and better future prospects and the companies and sectors which match with your capital requirements and Risk appetite. 

If you think such a share currently is available at a good price, there is no better time to invest when you make such identification, else you will waste a good investment opportunity waiting for the perfect time to start. Moreover, it is always easy to find the best to invest while looking at a past graph. It will be an easy judgment to identify dips and lows from a historic graph and then mark these as the perfect time opportunities for investment. 

And the fascination to find such sweet spots, from where the recovery itself yields a great return, if what we wait to invest and classify it as the perfect time to invest. But as easy it is to identify the lows while looking at historic data, it is not easy while at the current time. 

You cannot predict anything with certainty over the lows or high but would miss an important opportunity in this collusion. Moreover, in a longer time frame, such drops or lows won’t matter and you will earn great returns no matter of you focused properly on the choice of the company rather than the choice of Time. The bear market and the bull market are parts of the stock market. 

An investor who wants to invest in the stock market for a long-term horizon should not get bothered much by these situations. And none of them will ever be a good condition of the investor to 9nvedt as they will stay in a dilemma if they focus on time. Whenever stocks touch high or witness a sharp correction from its high peak, investors get in a dilemma whether to start investment. 

When the market reaches to make a lifetime high investors fear that the market may collapse or go into sharp correction leading to a loss for the investors. Similarly when the market witnesses sharp correction investors do not feel it is the right time for investment, as the market may continue its correction and cause huge losses. 

Therefore the focus should be on the strength of your analysis and choosing the best security to invest and if that decision is right, the time of investment does not matter as it always right to make such investment. And always remember – TIME IN THE MARKET IS BETTER THAN TIMING THE MARKET.