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Sensex Vertigo

I want to invest but I think markets at a very high level. I don't think it's the right time to invest. I am planning to invest in the equity fund as and when the market corrects 200 points- P Muralikantarao

I want to invest some money in the markets but I think they are already at a very high level. I don't think it's the right time to enter the markets at over 13,500. The markets may fall and I may lose my capital. But on the contrary, some reports also suggest that markets may peak further to 15,000. I have selected two funds- HDFC Equity among the equity funds, and HDFC MIP Long Term among debt funds. I am planning to invest in the equity fund as and when the market corrects 200 points. Please advice.
- P Muralikantarao

Your anxiety while entering the markets at a time when the Sensex has already zoomed to 13,000 is not without reason. But how can you be sure that the markets are at their peak and are bound to fall in the near future? Moreover, a correction of 200 points (at which you plan to invest) is hardly any correction. It is not rare to see markets make intra-day moves in that range.

You can find all sorts of reports with varying predictions of where the markets would be six months or one year down the line. But the fact still is that nobody can predict the markets with certainty and therefore, your investment plan has to be such that works for you irrespective of wherever the markets be or are predicted to be.

The best solution is to invest through a systematic investment plan. By investing on a monthly basis, you can average your cost per unit and are likely to avoid huge losses even if markets decline sharply. It has been repeatedly said that regular investing rather than trying to time the market is the best way to ensure your financial well being over the long term. Over a time horizon of 7-8 years or more, the risk of incurring losses in equities gets significantly reduced. If you are planning to invest for that long, you can go ahead without worrying about the level of the markets, rather than waiting for a correction of 200 points. Spread your planned investment over a number of months and invest small amounts regularly. Your fund selection is good and both of your funds have done well in their respective categories.


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