Investment Tips for Share Market : Last year on 23 March (23 March 2020), there was an outcry in the Indian stock market. Due to the impact of Corona, the Sensex had fallen by about 3940 points to reach 25,981 and the Nifty-50 fell 1,135 points to the bottom of 7,160. The fall of 13-13 per cent in both the indices had made investors almost pauper. Stock market investors lost around Rs 14 lakh crore on the same day alone. Whereas in the first full months he had lost 56 lakh crores. But the market is again on the high today. No one had any idea that the Sensex would reach a new high of 53,800 so soon. The Sensex has climbed 900 points in the last two days. The question is whether to enter it when the market is at a high or wait for the correction. This question is very complicated for investors.
Generally, investors look at the PE value while buying shares. It is very expensive at the moment. The PE of Nifty-50 is currently 21.3, which looks quite expensive. But analysts believe that as the economy comes out of the grip of COVID-19 and corporate earnings increase, PE will become cheaper. That is, investors will be able to buy shares at the right valuation. But it is difficult to predict when the earnings of companies will increase. There is no panacea for investing in a better way, but there are some formulas that investors can follow to put themselves in a good position in the stock market.
The stock market was at a high in January 2020 and reached the bottom in two months. Even during that time, when the market was at a high, investors were not able to dare to enter it. Even on 23 March 2020, when the market crashed, investors felt that it would fall further then they would enter.
Its lesson is that it is very difficult to tell when the market will fall and how fast it will fall or for how long it will fall. So keep investing without waiting for the fall. To date, the market has reached almost 30 percent above the high of January.
2. Don’t Wait for the Market to Go Bottom
Last year, Nifty-50 had fallen by 5000 or 40 percent in a single month. Investors felt that it would fall further by 10-20 per cent. If you were a savvy investor, you would have made some investments at lower levels as well. Whereas the mindless investor would have been waiting for the market to fall further.
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3. Investing with the help of SIP is the best strategy
It has been difficult even for the big players of the market to guess the volatility of the market. Forget about common investors. If you are a retail investor then invest through SIP i.e. Systematic Investment Plan. Whether investing in mutual funds or directly in the stock market, this strategy is very effective. You can top-up your existing equity portfolio whenever you have a lump sum amount. Or you can ask your financial advisor to put the third or fourth part of the surplus in the existing portfolio at a fixed interval.
(The stock recommendations given in the story are those of the relevant research analyst and brokerage firm and Financial Express Online does not take any responsibility for this investment advice. Investing in the capital market is subject to risks and please consult your advisor before investing.