Trying to time the market....a perfect recipe for failure.
Where do you think the Indian share markets are headed?
Are you anticipating some negative triggers from the Eurozone as well as the domestic economy?
Are you awaiting that market crash that will give you the once-in-a-lifetime opportunity to riches?
Or do you think the worse is over and the markets are gearing towards a solid bull run in the next 6 to 8 months?
Are you closely tracking foreign institutional investors (FIIs) data to predict the direction of the market?
Or are you monitoring inflation data and waiting for the RBI to cut interest rates?
In short, are you waiting for the perfect time to make your investments?
If your answer is yes, then you are probably making one of the most common investing mistakes.
Let me explain.
Every investor hopes to buy stocks close to the bottom and sell them around the top.
Yet, why is it that a majority investors end up buying high and selling low?
The problem is that when you're trying to outwit other investors, you are most likely doing what they are doing too.
In other words, you become a part of the herd that's trying to guess the market direction.
The history of the financial markets is replete with instances of how following the herd can be disastrous to your investments.
The other problem with timing the market is that you are only looking at the price movement of the stocks and not their intrinsic value.
It is no coincidence that the world's most successful investors have always focused on the later.
So, instead of the assuming the tedious task of predicting macroeconomic events and market movements, take the bottom-up approach and focus on individuals stocks.
If you find a stock with robust fundamentals, solid past track record and sufficient future growth visibility at a price that offers sufficient margin of safety, then simply invest in it.