When we think about changing jobs, getting married, buying a home, making an investment, launching a product or retiring, we decide based on how we expect the future will unfold.
Whenever the markets rise sharply the probability of forecasting to end the Bull Run increases sharply and vice versa in case of Bear markets.
Why people tend to forecast market so much? Don’t they enjoy the present?
Well those are behavioural questions and difficult to answer. But definitely people enjoy forecasting things.
Will the Sensex reach 30,000 or not is the question of the moment, and there are various views on it. Like, this is the mother of Bull Run, some says the 2007 Bear Stern moment is coming and market will go for correction.
So what should you do with your equity investment now? Here are different scenarios for you , from the common example of driving a car . The present scenario :
- It’s like high-speed driving on a highway and try to cover maximum distance asap but focusing more on brakes.
- Drive at high-speed, but make sure you’re in the toughest vehicle with good airbags so you can take the impact without being smashed.
- Let’s put it in this way you have full control on driving and you driving with full speed on express way with super safety like airbag, proper break, everything is as per you it doesn’t mean you are safe u may get hit by anything and all planning goes waste. Just because you are not sure when you will get hit you won’t drive at 10kmph on express and be cautious and can protect yourself you may get hit at 10kmph too.
Out of the above 3 scenario you decide which ever is best for you. I would prefer option C, as when I will read in detail it indicates the following:
- Concentrate your investment in outstanding companies run by strong management
- Limit yourself to the number of companies you can truly understand. Ten is a good number , more than 20 is asking for trouble
- Pick the very best of your companies and put bulk of your investment there
- Think long-term 5-10 year minimum
- Volatility happens carry on
Well after explaining above, The history says that market prediction has always gone wrong 😉
So do not dare to time the market.