Mutual Fund Investment Tips: Buy When Blood Is in the Street
It is a very common quest among the investors that when should they start their investments. There are many rumors too which describe that the best time to invest is when the market is going down, whereas some suggest investing in the up-going market trend. After listening to suggestions and reading varieties of tips on mutual fund investments published on various websites, the investors get confused as on what they should believe in!
If you are also confused, then you are very lucky that you are here reading our blog. After going through this write-up, you will be able to understand that on what basis you should determine the correct time of investing in mutual funds.
Various Suggestions Floating in the Market About ‘When to Invest’
- Invest When Bull Is Running in the Streets : There are many factors one should consider before investing in mutual funds, but one of the most important is to know when! Many say that a bullish market is appreciable to start investing, but we suggest to stay cautious because many investors unknowingly buy at the peak and tend to lose capital. So, if you are willing to buy during a bull run, then take experts’ suggestions to avoid investing at the peak time.
- Invest When the Market Is Bearish : Apart from the mass who believes that investing in the bullish trend is beneficial, there are investors who unknowingly form a group as they have a similar belief of investing during a bearish market trend. According to them, a falling market scenario is the best time to invest as they believe that the market may take the jump after consistently falling to a certain level. This leap will allow them to yield higher benefits in the long-term period. In easy words, they have a tendency to buy at lower NAV, which they can easily get during a bearish market trend. They do so with the belief that the market, in the long run, will go high, thus allowing them to fetch higher returns on their investments. It is true to some extent as during down market scenario, you can buy more units with less price, which stands more profitable than buying fewer units with high prices.
- Invest Without Considering the Bull & Bear : Before investing, normally, everyone takes a little knowledge of the market that whether it is moving up or down. But, this is what you might have never heard before that people invest without considering the bull and bear of the market. With the emerging trend of Systematic Investment Plan (SIP) and its fantastic features like ‘any day SIP,’ it has become more convenient to start mutual fund investment any day. And the matter of buying in up or down market automatically gets resolved by the “Rupee Averaging Cost” feature of SIP investments.
Different investors have different nature and point of view. All the three points as mentioned above stand true for different investors. You might also be investing in one of the styles as mentioned above. On the basis of different investment needs, these styles can be beneficial. But for the best approach, one must consider talking to a financial expert and not listen to the rumors spread by the others.
Apart from the three points as mentioned above, there is a very famous saying that “the best time to buy is when there’s blood in the streets.” It related to an investment style which is completely different from the above-mentioned three. It is contrarian investing at its heart, which has a strong belief that the blood will change the color. In simple words, the worse the things seem in the market, the better are the opportunities for gaining unbelievable or abnormal profits.
Contrarian Investing: Going Against the Crowd
Contrarian Investing, as the name suggests, is investing opposite in the style which the market is following. The contrarians always swim against the current; they assume the market to be wrong all the time. Maybe you are reading about this for the first time, but have heard the saying which goes on as “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.” This is what all contrarian investing means. By doing the opposite of the market, many legend investors have set good marks in the investment industry. You too can try doing this but after taking into consideration the other parameters of investing or consulting to your financial expert.
Bad Times Allow Healthy Buy
Moreover, it is no lie that buying during a down market scenario is beneficial and if the stock that you bought performs unexpectedly fantastic, then nothing can be a good time than that.
Henceforth, there are many ways through which you can attain your objectives effectively. But, if you want to dive deep in this segment and understand the terms more clearly, then be our regular reader and enhance your knowledge. On the other hands, if your objective is to earn profits only, then simply consult an advisor to get your monies deployed in the best schemes in the best time.
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