The Stock Market is trading around an all time high. A general question that comes to mind around this scenario is, is it the right time to invest in share market? Share market strategy followed by industry giants all over the world is to buy low and sell high. Current market conditions have created an ambiguity in retail investors about the logic of investment in the market as of now.
When it comes to investing, market players have always suggested a systematic, structured approach towards building a trading plan:
Step 1 – Investment objective
Step 2 – Identification of investment opportunities
Step 3 – Proper diversification of investment portfolio
Step 4 – Adjustment and tweaks in the portfolio as required
Step 5 – Clearly defined exit parameters.
When an investor has a sound trading/investment plan, it is imperative for him to understand the market condition, to arrive at a logical decision. The ambiguity of whether to invest or not when the market hovers around the peak is understandable. However, with a logical investment strategy, investment at any point in the market may give substantial returns.
Three basic reasons to understand why is it logical to invest, even when the market is a near peak:
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Is it really a Peak:
The above chart depicts the Nifty since its inception. The blue lines represent various peaks that the stock market has reached during this time period. When an investor is unsure whether to invest in the stock market due to the market being near its peak levels, the chart clearly shows that the market has moved to peaks, traded at them, retraced, and even broken them. In the long run, the market has risen from all peaks and provided reasonable returns on investment.
Keeping the aforementioned in mind, an investor can continue to invest, even when the market is nearing a peak, with a disciplined approach and sound trading plan, because even if the market moves lower, it can be managed. If an investor has a longer-term investment perspective, investment at peaks in a carefully selected stock portfolio may help him achieve his investment objectives.
-
Rupee Cost Advantage: Though the term
is well-known when dealing with Systematic investment
plans, if an investor employs the same
investment strategy in stock market
investments, the same advantage can be obtained here as well.
When the market is nearing its peak, a systematic
approach to investing by purchasing a few stocks at
regular intervals can assist in gaining a competitive
advantage.
When the market is near its peak, and the investment yields a positive return, an investor can add fewer stocks; if the market falls, the amount of investment can be increased to allow for a lower averaging of market exposure. A consistent and systematic investment strategy in markets nearing their peaks can make a significant contribution to building a huge corpus of investment.
- Sector-wise parameters: Investing when the stock market’s all-time high levels are trading makes sense when we divide the investment into different sectors that are still expected to perform well in comparison to their peers. A rising trend in stock markets can be attributed to a few sectors outperforming while others remain within their range-bound level. If a few stocks within these sectors exhibit strong quantitative and qualitative parameters, the same can be a good investment strategy.
The above reasons answer why investment in stock markets at an all-time high is not a bad idea. Considering that even expert professionals do not stop their investment strategies in stock markets, retail investors can tap into the opportunities with logical investment decisions.
For investors who wish to invest in these markets in the way professional share market strategy works, the offerings ofWealthDesk provides an excellent solution. WealthDesk enables investors to invest in a professionally crafted portfolio of stocks and ETFs, popularly known as WealthBaskets. Here an investor does not have to time market but can depend on experts for the same, who monitor the portfolio and suggest timely entry/exits. These Wealthbaskets are created keeping in mind the different psyches of investors. Some Investors prefer a riskier proposition, while others are risk-averse. Some want to invest for a longer period, while others are looking for shorter-term investments.
WealthBasket provides solutions for investors and caters to individual investment goals. Basic features of WealthBasket are:
- These are crafted and managed by professional advisors registered with SEBI
- Regular rebalancing of portfolio is done to the portfolio as per requirement
- Continuous research towards various aspects of each portfolio is done
- Has a variety of options for the investing market catering to individual investor’s requirements.
Conclusion
With discipline and sound strategy, investing in the market when the stock market’s all-time high is near can be a good proposition. For those who want expert ways to cater to such market conditions, WealthBasket is an excellent solution. Share market strategies employed here are so varied that an investor can choose the optimum stock market investment solution, depending upon own risk profile. Following the logic of WealthBasket, it suffices to say that it is the right time to invest in the share market. Choose a suitable WealthBasket here.
FAQs
If you understand the fundamentals of the stock you wish to buy and your investment horizon is for the long term, this is a good time to buy stocks.
Yes, stock investments can be done in a similar way to SIP. WealthBasket offers a systematic investment plan to invest in share markets.
Historically stock markets have reached and breached many peaks and provided significant results. If investment tenure is for a longer duration then, investment near peaks can provide good returns and help in creating wealth.
Yes, professional advisors registered with SEBI work with WealthBasket. These experts keep rebalancing the portfolio with continuous research until the WealthBasket goal is achieved, enabling the portfolio to generate an excellent return.
