Is it safe to invest right now as the market is moving only in one direction? How long is this uptrend likely to continue?
I wish I knew, but I don't have an answer, and I don't think anybody will have an answer to this. Many people are guessing that the market is poised for a big decline any time, and they have all been wrong in the last one-and-a-half years. I think I will also be wrong if I try to guess the market's direction, so I won't say anything, just not to be embarrassed. All I would say is that you don't have control over the state of the market, or you don't have control over the timing of the market's fall. What we know very well is when you are likely to need the money. We also know how nervous we get when we see a significant decline in the market. If you actually lost sleep in March 2020, not because of a pandemic, but your investments were falling in value, you need to figure out what part of your money should not be in equity. Moreover, do you have an emergency fund for yourself? If you have these shock absorbers or are prepared for a big fall, you will be much better placed and not get upset or nervous. If you have a term plan, health insurance, and the emergency fund, your risk tolerance increases. Moreover, if you are in a stable job, the risk tolerance goes up even further.
I would say that do all those things and then try and arrive at some kind of allocation to fixed income that will not go down. Many people think in terms of allocating either 0 per cent or 100 per cent in equity. That's not the way to look at it. The money you have invested in equity fluctuates more and hence needs to be rebalanced. For instance, if you had kept 75 per cent of the money in equity in the last one to one-and-a-half years, it might have become 85 per cent of your portfolio now. Thus, trim this allocation down to 75 per cent. It will ensure that you don't regret it if the market moves in either direction.