Sensex has just Crossed 60,0000. Nifty is at an all-time high. So now, will the markets fall? Or will they continue their historic rise?
In this article, I will tell you the Top 5 Strategies To Invest When Market is All-Time High!!. To invest or not to invest? Let’s check the data for the past year surprisingly, people asked the same question one year back, then the Sensex was at 40,000 levels the same question was asked this year in may.
while then Sensex crosses 50,000 for the first time not that the markets have reached 60000 people are asking the same question again. is the bull run over? or Sensex will break 1,00,000?
In today’s blog, we will learn about 5 strategies through which you can invest in a high market and still keep your money relatively safe we will also mention some tools. that can help you make financial decisions if you get value from this blog. then please share it with your friends. Remember we are talking about money before you take any decisions to follow that DYOR principle Do your research
We are not giving you investment advice but as an elder brother, I am sharing our experiences with you making personal finance interesting to you is our mission.
Strategy 1. Don’t Invest!
What nonsense? how can not investing be an investment strategy?
let me explain If you have a loan that you need to pay instead of investing, you can pre-pay your loan you can save the interest you pay on it every day. And be free from the EMI burden. But if you keep your money in a savings account. then this strategy has a small problem.
you get around 4% interest in a savings account and inflation is around 6 to 7% this means that the money not getting invested. Is losing 2% to 3# of its value every year.
plus when we see that we have money in our bank. our spending increase I have to be honest when I got my first salary. I immediately bought a new phone for myself because it felt like I had a lot of money in the bank. The money that is not invested. get spent on unnecessary things.
what if the market is still undervalued?
This year, we broke the past 10-year records. Indians are shopping and spending their money. the more consumer spending will rise the more retail stocks will keep increasing. who knows maybe the senses will cross 70,000. at that time if you are not going to be a victim of FOMO. Then this strategy is the best for you.
2. Invest In Low Debt Companies
Invest in low-debt companies. Think about it would you like to invest in a car that makes its petrol? that means you don’t need to pay for any petrol. of course, right?
a company’s petrol is its capital. That means money. In business terms when a company can fund its capital. It is said to have strong fundamentals. this company’s car will look something like this.
To put it in very very simple terms company’s employed capital funds its business expenses to build the product or service, to transport and sell it, the company needs to make spends after the product is sold the company makes profits from this profit when all other expense is deducted.
The balance is enough to fund the expansion of the company. in other words, the company does not need to raise external loans. we will call these types of companies financially independent. In times of difficulty or when a crisis like Covid Strikes. making repayment to lenders is difficult for the company. the company can fail and be shut down, not having a high debt is a big risk and you should avoid it. So how do you figure out which companies are low debt?
you can see company financials on the screener. in.
when the market is high, a concentrated portfolio can increase your risks in the last year because of covid. Pharm stock has performed quite well if you only invested in pharma stocks in the last year. and in the future, if the situation changes. which impacts all parma stocks.it will impact all these stocks and your wealth as well. the strategy to counter this is to diversify your assets. you can diversify based on different industries. instead of only investing in tech stocks or pharma stocks. you can maintain a balance. you can also diversify based on the size of the company. You must have heard THESE TERMS
LARGE-CAP, MIDCAP, AND SMALL-CAP
when the company is small the growth potential is high but of course, the risk is also high on the other hand, when a company grows the risk is reduced. your portfolio needs to balance. at the same, we also have to remember that some factors impact the market overall.
A sudden lockdown being declared will affect all businesses. in such types of situations. if all of your assets or all of your money is not only in equity but distributed across different assets reduce the risk you. It is believed that the gold and stocks market is inversely proportional when the market falls people shift their money to the gold side.
4. Growth vs Value Investing
your strategy depends on your mindset some investors invest with a growth mindset and some investors invest with a value mindset in simple terms growth investors focus on the future of the company value investor focus on the current stock price based on the health of the company.
India Added 28 New Unicorns in the year 2021. Today India has 66 unicorns. Unicorn privately held startup with 1 Billion +Valuation.
if you think that the market is overvalued you can start finding value stocks these are big companies’ industry leaders with no red flags. ask yourself a question. which is India’s largest IT company? which is India’s largest private bank? which is India’s biggest FMCG company.by seeing their present and past values. you can predict their future values.
5 . Invest In Small Parts.
Even the world’s most famous financial expert says that you can’t see the future people thought the market would fall after the covid second wave there would be a bear phase but the market is strong. china’s ever granted sparked a crisis there and people said there would be a worldwide recession but the market is strong not the US is panning to tax unrealized gains.
The US market can impact the whole world even after this news came the markets stayed strong three will always be market corrections. but nobody can say with a 100% guarantee. that they can see the future when so many things are out of control we believe in disciplined investing. every month fix an amount that you are comfortable with and systematically invest it. like mutual funds, you can do a SIP in small cases as well.
This will help you average out your cost. if the market falls in the next month you will get more units for the same price. and you automatically keep on making investments always remember that market seems high because we see them in comparison to the past. I know after covid nobody imagined that the market is recovered so fast.
Remember we cannot time the market all we can do is decide for how much time we can stay in the market before we see a company’s financials need to see our own financials. understand your capacity to take risk % invest and only then invest and sharing them is a profitable message with you make a difference to me
That’s for today guys! I hope you gain extra knowledge about the stock market.