How to Invest in All-Time High Stock Market?

Introduction:

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.

Conclusion:

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.