
19th December 2007, 12:08 PM
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Member
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Join Date: Dec 2007
Location: Mumbai
Posts: 54
Rep Power: 6
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TIMING the Markets
There is never such thing as RIGHT time to enter a market.
2 strategies to ensure that one does not need to Time the market/stock:
1) BUYING IN SMALL QUANTITIES ON DIPS,
2) SELLING IN SMALL QUANTITIES ON RISE
Timing the markets is not the best decision to do. Though, its fine that one can do some shopping on corrections. But, there is nothing like timing the market. One should enter the market in small quantity/lots. One can do buying in small tranches at various point of time. Thus, spreading the risk at different poin in times is important just as one follows SIP ruote in Mutual Funds. In stock markets, there is nothing like SIP, so we ourselves have to spread the risk over different point of time & prices.
It would be prudent to break the Cash that one wish to deploy in stock markets in to 4 parts & employ them one by one at different points of time/prices.
Also, it is not advisable to time the stock at some low/bottom price & wait for that illusive bottom & lose the opportunity to buy the desired stock. Rather it would be prudent to buy in 4 small lots at different price points on approximately every 5% to 7% dips.This strategy can be called as "BUY IN SMALL QUANTITY ON DIPS".
Similarly, one can use the same strategy while SELLING also "SELLING IN SMALL QUANTITY ON RISE"; this ensures that an investors does not sell whole quantity held at one go & miss the bus for the remaining part of the upward journey in the specific stock.
Last edited by BULLS : 20th December 2007 at 07:54 PM.
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