In bad times, the first thing impacted is the decision-making process.
Whether it is investments or purchases or anything else, one defers decisions. This is a good time to ask yourself whether inactivity is causing decision paralysis in your investing life, too. Wherever we go, we see investors in a state of limbo. They are unwilling to commit their cash to the stock market, saying the current environment is too gloomy and they will wait for a clearer picture before deploying their savings.
Here are a few situations that should help you take the plunge:
i) Seeking clarity in investments. There is seldom such a perfect situation. Hence, our quest for complete clarity is utopian and may lead us to wait eternally.
In fact, periods such as the end of 2007, when things were appearing best for India (although not for the world
as a whole), was actually a bad time to invest.
Also, people say markets are currently too volatile. However there is an inextricable link between financial markets and volatility. You will rarely see placid markets and very often, whenever you do, it is merely the calm before the storm.
In waiting for that 'perfect moment' we are inadvertently indulging in market timing.
Just like time and tide, markets, too, wait for no one.
The best moment to invest is always known in hindsight only. In trying to avoid the pain of short-term losses, investors may experience the pain of missing
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