How to Invest in All-Time High Stock Market?2 min read
How to invest in the market when the market is making new highs every day and is still moving up? Let’s learn more about it.
The stock market is currently at its all-time high zones. The investors feel left out if they don’t invest in the stock market (Fear of Missing out). But there can be a lot of risk entering the market at its peak as well. SENSEX has crossed 53,000 levels this time making a lifetime high.
The thing to keep in mind while investing in all-time high stock markets:
1. Don’t invest in a lump sum manner:
- In some years the investors get more returns than expected but this does not tell that an individual should invest all-in at that time.
- An investor should have rational expectations for returns from the Stock Market of 12%-15%.
- The investment strategy should only be in a staggered manner to keep themselves safe from market volatility.
- There are 2 ways to invest in a staggered manner: SIP (Systematic Investment Plan)- which is done for the future cash flows that will come and STP (Systematic Transfer Plan)- it is defined as investing currently in liquid securities and invest that in the next 12 to 18 months.
2. Behaviour Management before Investment Management:
- The behavioral management of an investor should be given more importance than investment management in this market situation.
- An individual should stick to its investment strategy even if the market has shown sudden volatility.
- The investor would feel FOMO if the market will go on further but it will limit the downward risk for the same.
3. Follow Asset Allocation:
- This is the most important strategy for an individual to allocate all its assets properly in different forms.
- If an individual has a large corpus, then, it is advised to diversify the portfolio into equity, debt, gold, and other investment opportunities.
- One should also keep on rebalancing the portfolio as per the demand of the market to get higher returns.
An investor should keep in mind all the 3 points to get a better sight of how to invest properly in the stock market which is at its all-time high. If these discussed points are followed, the returns are likely to rise and the risk will be reduced. Do consult your financial advisor before making any investment strategy.