Is market overvalued?
There is a saying that "when there is greed be fearfull and when everyone is fearfull be greedy". Now every tom dick and harry is talking about investing in market and earning great returns. Are we in a bubble ? There is no easy money in markets but currently u will get lot of advice on which stocks to buy from everywhere. What should one do? Pause SIP , remove all money from stocks park it in Liquid fund, FD, bonds, do nothing? Thoughts
Don’t know about other things in your post
But don’t pause SIP , the very purpose of SIP is that you do not have to take such decisions!
Big money is made by not timing the market but being in the Market .
I agree with what u are saying but times like now are unprecedented.. looking at the situation I am fearfull..
Another one is called ‘the greater fools theory’ - similar concept. In my view, keep sell price targets and keep booking profits once your investment reaches that target. Then reinvest if you feel there is more juice. Keep booking profits and keep eyes open for signs of a downturn so that your downside can be limited. However this requires very active portfolio management, hence I always suggest to outsource it to an expert and use your time productively in your areas of interest
I have strong interest in the market ..I work for the stock broking firm too.. however we are not allowed to trade actively and we are supposed to disclose all transactions
design
Stealth
9 months ago
If the point is to reinvest, why book profits? Might be a stupid question, but I appreciate your input.
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A friend is waiting for bear market from 2021 Jan. While I have Yolo-Ed SIP into index every week in that time span.
My worry is what if ur friend becomes right u will end up with zero or negative return in coming 2-3 years..
Apradh
Stealth
9 months ago
Statistically, no. On a decently long horizon, he will end up making more (atleast per history).
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Has anyone tried timing the the fall and what was the outcome? I know it's dam difficult but is there any warriors who have done that?
Not exactly timed the fall, but tracked Nasdaq actively and poured money when it was local minima around end 22- beginning 23.
Similarly poured chunks when NIFTY50 made bottom in 2020.
Both such estimations boosted the XIRR very much.
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As you mentioned moving money to Bonds, yes, you should keep balancing the portfolio. But if you don’t know what to do with the money, don’t just plug out and sit with money in the bank. FDs are good but post tax RoI is still not exciting unless you have clear goals on expenditures.
Timing the market is like catching a falling knife.
Keep investing as you were, aligned to your goals.
Don't read the headlines or the headline numbers. Completely pointless activity for the lay investor, especially if you are using MFs as your primary investment vehicle.
1. Pausing an SIP is the worst mistake a retail investor can make
2. If anyone knew if the markets are overvalued, they wouldn’t be here on grapevine giving advice about it. Even billion dollar hedge funds can’t give you a deterministic answer for this question
We don't have to be right to the tits.. we will be fine even if we are moderately accurate .. +-6 months
