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| When to Invest ? Bottom Fishing |
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| 10.06.2009 A peculiar problem most of the investors tend to do, is end up as virtual investors and get physched by the market. Let me explain.
A typical investor will enter at say 17000 levels of the sensex. He buys because his other office colleagues are buying and they have made a bumper profit. They do not want to be left out. They enter as long term investors with a frame of 3 to 5 years in mind. However, when the market drops to say 8000 levels, they become desperate (and sick). They feel unsecured and think, that the market is crashing and they should sell now and enter at further lower levels. Or worser still, they want to book lossess and park the funds in Bank FD. They would like to catch the bottom of the market. They do not have money.
Suddenly, the market goes up. Now they do not want to encash. Suddenly, they are liquid and have enough funds to buy, but they want a market correction.
90% of the cases, Events do no occur WHICH EVERYBODY IS PREPARED FOR. We have seen recent examples. Everybody was ready to buy at Sensex levels of 6000. it did not happen. Everybody was expecting a huge correction after election results. it did not happen. Everybody is waiting for 1000 point correction. Its not happening. Everybody expect market not to go beyond 16000. It is quite likely to happen shortly [ as i write the the market closed 15460 today ].
My advise is always invest with amounts which you do not need for at least 3 to 5 years. Do not make your self sick with notional lossess. A LOSS IS A LOSS when booked. If the stock you are holding is a fundamentaly sound company, then do not worry. Larget caps may give less returns, but they tend to move up first. A Large cap stock may give you entry and exit 10 times.
For feedback write to info@vistashares.com with subject is "Bottom Fishing" |
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