Waiting for the right time to invest?

Thus, at the cost of sounding preachy, what we can conclude is that lazy investors who didn’t react to news/events by taking action have performed better than those who stayed out of markets fearing correction or waiting for the ‘right’ time to enter.

The right time is now

As investors, you would be bombarded with headlines of markets reaching all-time-high. But markets have tested many all-time-highs in the past and basing your investment decisions on these levels can be counterproductive.

“The best time to plant a tree was twenty years ago. The second best is now,” goes the timeless adage. If you have never invested in equities and are waiting for the opportune time to enter when markets correct, you may be left waiting. Rather, you could start investing to plan for life goals by consulting your trusted financial advisor and not ponder over the right time to start.

Investors would do well to take action based the following triggers:

• Following a goal based investing approach helps you stay focused on your investment journey irresepective of what’s happening in the market. If your current asset allocation has drifted from its original target, it is wise to prune your exposure back to your desired asset allocation.
• The second instance when you can realign your portfolio is when you are nearing a goal. Around 6 to 12 months before approaching a goal, you can start shifting your corpus into Conversative Hybrid Funds to shield the corpus from the vagaries of market.
• The third instance when you can look to tweak your portfolio is when your funds are not living up to their stated mandate and removing/adding new ones would add value through diversification not just through market cap but also investment styles such as value, growth, momentum and quality. For investors who are keen to make the most of volatility, keeping some dry powder for tactical allocations can also be considered.

For those who are worried about mixed cues of geopolitical situation, Sensex reaching all time high and intermittent volatility, participating in equities through Balanced Advantage Funds/ Dynamic Asset Allocation Funds or even Multi Asset Funds would be a good option as these funds have an in-built model to take the asset allocation on your behalf and also provide the benefit of diversification.

To sum up, markets will continue to be driven by human innovation and growth with intermittent corrections on the way. Thus, once you have invested based on your risk appetite and goals, you should review your portfolio periodically with the help of a trusted advisor and try to stay the course till your goals are met.