Equity Market Investment: Do you know what is the golden rule of investment amidst ups and downs in the market? – what is the best way to invest in equity market
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Investor’s first question
The most common question in the mind of investors is whether this is the right time to invest? I believe this is not the only question to ask. You don’t read newspaper headlines to decide whether you should buy equity today or sell equity tomorrow. Instead, ask yourself how long you are willing to stay invested in the market.
how much risk can you take
Before investing in the equity market, ask yourself how much market risk you can tolerate. That’s when your investment journey begins. If you may need funds in an emergency in the next 6 months, stay away from equity in these 6 months. But if your investment goal is long term then you can look at equity. That is, at present, investors should invest money in the stock market keeping in mind the long term.
The market is not always the same
Also, remember that markets are inherently volatile in the short term and will continue to be so. Due to negative news or sentiment, there may be some fall in the market, but the market does not stay down forever. When the sentiment improves, there is a significant rally in them. Hence, for a long-term investor, this time is like an opportunity to invest in equity and create long-term wealth creation. As legendary investor Warren Buffett says, be greedy when others are fearful and sell when others are greedy.
What is the Golden Rule of Equity
The golden rule of equity is to decide your asset allocation and stick to your investment goals rather than paying too much attention to day-to-day price movements. Mutual funds offer various options like SIPs and STPs to hedge the market risk. Because by buying at different levels of the market, investors get the benefit of rupee cost averaging. Also, avail the services of professional advisors and mutual fund distributors to help you decide your asset allocation and investment options.
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