When will be the right time to invest in the share market?

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Timing the market is always a huge concern and the priority of anyone planning to invest in the share market. This concern always provokes the question “when?”, When is the right time to invest in the share market, for which the answer remains the same, that is, “Today” as no one is capable of timing the market and it is nearly impossible. 

The Indian share market has gone through a roller coaster ride in between 8 months of the pandemic, having a sudden fall, and a savvy recovery. Following the nationwide lockdown, untaught investors panicked and sold their share market investments in March 2020. Whereas the sophisticated investors invested a bit more than the usual during that time and earned a profit of 50% right when the markets went upwards. It is wise to follow a simple strategy called “buy on lows and sell on highs” whenever the market seems unpredictable. 

Golden rules of share market investments

None of the investors glides carefree through the share market as they succeed in their trade. Moving towards success is something you do step by step, for which we have figured out some golden rules that are likely to increase the chances of earning higher returns from your share market investments. The rules are, 

  • Avoid the herd mentality

Herd mentality distinctly influences the majority of the investment decisions of the share market and tries to replicate their fellow investors. People who try to become proficient investors must avoid this herd mentality of blindly investing in shares following their fellow investors/ friends/ colleagues/neighbors etc. try to learn on your own and do your research while investing in shares that reflect your investing schemes.

  • Making wise decisions

It is inevitable to go through the fundamental and technical factors of share market investments before you decide to invest in any shares. Data may not be easily available in some industries, in such instances you need to put more effort to gather and evaluate data. There are some cases, where the balance sheets might be manipulated by the management, hence it is not advisable to invest based on the face value of a share. Rather ample research must be done before investing. 

  • Having a practical investment approach

Many investors lack their ability to control emotions like fear, greed while investing as those emotions deliberately make them do take wrong decisions and lose money in the share market. Generally, in bullish markets, the investors try to foretell on a share or create heavy positions greedily to earn more but end up losing their investments. On the other hand, when the markets are bearish, investors sell their products being panicked by the market status and suffer huge losses out of their fear. To earn profits in the share market an investor should have a non-emotional and practical approach towards the share market investments, to create wealth healthily.

Risk Managements When will be the right time to invest in the share market?

  • Create a diversified portfolio

The key to earning higher returns in the stock market is to have a diversified portfolio across different asset classes and instruments, for which you must steer clear of sector or theme-based investments. Instead, it is wise to create a diversified portfolio of shares from multiple sectors such as health, auto, FMCG, etc. 

  • Realistic expectations

When you are investing in the share market, you should practice realistic expectations, you can’t expect a 50% profit in one year and if you are a person with such expectations. Surely share markets are not your cup of tea. Have a realistic return and book profits whenever you see an opportunity.

Best time to invest in share markets

Choosing the right time to invest is as important as finding a fundamentally strong stock. Let us see what are the instances suitable to buy shares:

  • Buy on rumours

A fact in the share market is to “Buy on rumours, sell on news”. Whenever a company is anticipated to declare dividends or bonuses, investors will immediately buy the shares to have power over increased dividends or share prices. Again the key is to buy fundamentally strong stocks. 

  • Uncertainty is the friend of every investor

Blue chips stocks are available at bargain prices when there is any uncertainty in the market, so an investor must observe fundamentally strong stocks that are trading cheap due to the market uncertainties.

  • Profound research

Price tags and advice will be provided by research analysts as a huge help for the investors, but an investor has to do their homework while buying a share. A company’s annual report, candlestick chart will guide you through the knowledge of the market and keeps you updated on the latest news, for you to decide while buying a share. 

Risk Management When will be the right time to invest in the share market?

The appropriate time to book profits

An investor should sell their shares only in two instances. Firstly, if there is an immediate need for the money, and secondly if the investment objectives are achieved. 

  • Whenever there is a reasonable rise in price

At times the shares that were recently bought may rise adequately in a short span of time. This can be a good time for an investor to book profits. 

  • Whenever the investment goals are achieved 

It is important to have a target or a goal while investing in share markets, investors can book profits once their target is achieved. 

Share markets are highly volatile, where the shares will be going up or down steadily. Hence timing the market to choose the appropriate time to buy shares is quite difficult. Therefore a quick-witted investor is someone capable of making money in both the bullish and bearish markets.

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