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Timing the Markets

Timing the equity markets is never a good idea. Investors should just invest regularly to reap benefits

I am currently investing in mutual funds. I wanted to invest nearly Rs 10 lakh but do not want to invest all in one go but divide it into say 15 different purchases. If I do regular buying of MFs on every dip in the market each month instead of going through the SIP route, will that be beneficial? I don’t want to invest Rs 5,000 or Rs 20,000 through SIP.

You should not attempt to time the market. Equity funds are a good way to invest in equities for you long-term investments. SIP is a good way to approach it as trying to time you investment on dips may be difficult to implement. When markets go down sharply then we get fearful and wait for the next fall and markets turnaround to go up and up when we least expect it go up. With SIP one is able to participate with less anxiety. You should focus on two things – choosing few good diversified funds with track record of providing superior risk-adjusted return atleast over a fund market cycle. And SIP period -- over the next 12 months, 18 months or 24 months based on your own views on the market outlook.

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