A general trend that one observes in the equity market is when share prices start falling, many investors, especially in the retail segment, follow a wait-and-watch policy to enter the market. They try to look beyond at the reversal of the ongoing trend.
However, by the time they react, equity markets usually move up substantially. By then they find the market overheated and either stay out and wait for the next correction to participate or are left with no option but to invest money at those levels.
As it is sometimes difficult for investors to calculate the reversal in trends at its early stage, most enter when the markets have run up significantly. Stocks provide low risk high returns in long run which makes the point of entry insignificant, however, generally not many investors invest with a long term perspective. (Study the chart below to understand this statement.)
Read more here: http://www.personalmoney.in/5-tips-to-select-stocks-for-investment/1543
However, by the time they react, equity markets usually move up substantially. By then they find the market overheated and either stay out and wait for the next correction to participate or are left with no option but to invest money at those levels.
As it is sometimes difficult for investors to calculate the reversal in trends at its early stage, most enter when the markets have run up significantly. Stocks provide low risk high returns in long run which makes the point of entry insignificant, however, generally not many investors invest with a long term perspective. (Study the chart below to understand this statement.)
Read more here: http://www.personalmoney.in/5-tips-to-select-stocks-for-investment/1543
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