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Timing Pitfalls

I want to invest some money in the market but I think it is already at a very high level. I am planning to invest in an equity fund as and when the market corrects 200 points. Please advice.
- Anonymous

I want to invest some money in the market but I think it is already at a very high level. Should it fall, I may lose my capital. But should it continue to rise, I will gain. I am planning to invest in an equity fund as and when the market corrects 200 points. Please advice.
- Anonymous

What you are doing is trying to time the market. Here's our advice to everyone waiting for a correction. There may not be one. The laws of physics do not apply to stock markets; therefore what goes up need not come down. At least not in the near and immediate future. Stick to a simple principle of investing regularly. If you have a lump sum amount, invest it in an ultra short-term debt fund and institute a Systematic Transfer Plan into an equity fund. Else stick to a plain vanilla SIP. Once done, all you need to do is monitor your fund for slackness in performance. If you are invested in a Value Research rated fund, look out for a re-rating of the fund. It's really as simple as that.



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