New investors often ask questions to analysts regarding the entry strategy to jump into equity markets. Most of them fail to understand that, just like there is no short-cut to the success path, there is no magic formula that can yield money in stock markets.
Moreover, the urge to enter market usually increases during raging bull phase and optimistic market sentiment. But, when the chips are down during the correction phase, investors fail to muster courage and invest in stocks thinking there is something wrong with the system. It is nothing but the play of fear and greed while taking actions based on emotive decisions.
Long-term investment has always rewarded investors with handsome gains even during tough inflationary situations. Thus, priority for the investor should be to determine their future goals and corpus requirement, and allocate money systematically to achieve growth through various investment options.
Investors should look to build up a portfolio taking into consideration diversification by time and money. This strategic approach not only cuts your risk but also offer shield against any sharp market volatility. Investing lump-sump at any particular level is fraught with risks, as it is hard to determine as to where are markets headed next.
Specifically, new investors should stick with front-line large-cap stocks with good fundamentals and management quality. Once investors gain more confidence and experience, they can diversify their portfolio into high-beta mid-cap counters.
Viral Dholakia
Viral Dholakia is a commerce graduate and a writer for financial magazines & is passionate about blogging and Capital Markets. Stay tuned to LastBull, to read more articles from his pen.
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