What is the right time to invest in the stock market?


What is the right time to invest in the stock market?

Indeed, with the Coronavirus pandemic, businesses may not be doing well especially with the lockdowns and interruption of supply chains. As you may be aware, stocks represent ownership interest in a company, which provides investors with the opportunity to make profits either through dividends or capital appreciation. the stock affects the investment of the shareholder. In other words, when the stock’s value decreases, the investment also loses its value.
The continuous price decline has presented investors buying opportunities, since they can acquire the stocks more cheaply. However, the stocks might take a longer time to recover. Therefore, if you are buying into the stocks, do it for the long term. You have indicated that there are stocks you are looking to invest in. This means that you have a watch list. Watch lists help investors monitor and spot investing opportunities in the stock market.
On the other hand, stocks whose prices have continuously been declining while its peers are stable or appreciating are a red flag. If you are interested in the stock, understand why the price has been declining and ask yourself what other investors are seeing that you’re not. Buy a stock whose price you think will improve after the crisis. A common mantra among investors is “buy low, sell high”. You should also look at the returns you stand to gain with the stock once the situation improves.
The corona virus pandemic has rattled global economies and triggered an across-the-board sell-off in equities as an asset class. Since the first corona virus cases emerged in late 2019, global markets have sharply fallen. The Dow Jones Industrial Average (DJIA) and the S&P 500 ended their 11-year bull-run—the longest ever in history—as the S&P BSE Sensex and the Nifty 50, too, entered bear-market territory with a fall of over 30 per cent each. A fall of 20 per cent or more in a stock, or an index, is typically regarded as a bear phase for that traded unit.
Another silver lining as regards valuation is that in previous cases of market crash such as the GFC, broader markets (mid-and small-caps) were in euphoric zone, analysts said. Currently, broader markets do not indicate any euphoria, as they have witnessed significant under-performance since the 2018 beginning.
After making huge losses by trading myself I realized that I really need a mentor. so after a lot of research here and there I decided to study market by reading books wonder it was my right decision as I started getting good results as well as I learned where I went wrong. I have been taking their services since a very long time now. I would suggest everyone out there to find your mentor if you don't have enough knowledge of stock market.
Are stocks the easiest way to build wealth?
Here are six reasons why, if you've not invested in stocks yet, you will definitely want to start this year:
  • Opportunity to own an existing business: When you buy a stock, you get to buy a stake in an already existing business with the huge advantage that business already has all its employees and infrastructure in place, and is already up and running. You straightaway get a claim on the businesses future profits (in your proportion of ownership) without any of the headache or effort involved in running it.
  • No hassles of negotiations and brokerage: With stocks, the price is right there for you to see. No hassles of negotiating with the opposite party. The brokerage is usually pretty low too (usually a maximum of 0.5%). This helps ensure that a substantial part of your investment is not eaten up by frictional costs.
  • Little money required: Think about this. Even if you plan to start a small grocery store in your neighborhood, you will have to stake a substantial amount of money on the success of just one venture that may or may not take off as planned. Compare this to buying a stake in a business in the stock market. You can get a piece of the action with even just a few hundred rupees, let alone lakhs and crores.
  • The prospect of a higher return: One thing at the very core of choosing to run a business instead of investing your money in a bank fixed deposits the expectation of higher returns on your investment. Thus, businesses usually strive to earn returns much higher than your run-of-the- mill investments. The trick is to buy a stock that has shown that it can accomplish the above with reasonable certainty, and to buy it at a good price.
  • Liquidity: Buying stocks, you instantly rid yourself of all the above problems. You can instantly buy and sell your stake in the business with a single phone call or a few clicks of your mouse.
Sources of information on companies
  • Offer documents: One of the best sources for understanding a particular sector or industry is the offer document of the company, if one can get hold to one.
  • BSE/NSE announcements and company press releases: Apart from annual reports, it is the official company documents such as press releases, announcements, and presentations which are released in regular intervals. The source for such information is the BSE or NSE websites and the company's website.
  • Business dailies and other media: Newspapers and news channels are a great medium for gaining updates on companies. Interviews with managements provide good information on the company's views, plans and strategies.
This is not the end of investing in equities. We have seen such situations many times in the last couple of decades. As regards the COVID-19, one now needs to monitor fresh cases in the US, Europe and India. Developments in these geographies will decide the markets trajectory from here. Typically, when the markets fall so fast, there is some support once they slip around 25 to 30 per cent from the peak—and that’s where we are right now in terms of current market. The biggest correction phase in history was around 60 per cent fall from the top in 2008 during the GFC. The corresponding level now works out to be around 6,000 on the Nifty, which should act as an absolute support base,” says U R Bhat, managing director at Dalton Capital.

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