Published : 21 Apr 2023
The one of the factors that causes the share prices to fluctuate is volatility. For traders, it’s the best thing as they can take advantage of the price movements and book their gains. While, for long-term investors or the new market participants, it can be challenging as the total value of the portfolio keeps swinging between high and low on a daily basis.
It is probably the most irrational thing to do. Many investors time and again have tried to fish out the bottom of the market or tried to bet on the highs of the market. More often than not, they are incorrect in guessing the low or the high point and either they lose out on the investing opportunity or make a loss.
SIP method involves buying small quantities of the security over a period of time at regular intervals. This gives an advantage to buying more units when prices are low and fewer units when prices are high, and over time. This method averages cost per unit which may be far less than the current price per unit.
For those are in the market for the long haul shouldn’t pay attention to the daily fluctuations of the market. Historically, these fluctuations are only transient in nature and have a high probability of maintaining an uptrend in the long run
All asset classes and sectors have a cycle, during favorable times they enter a bullish mode and later either consolidate or correct over a period of time. Thus, the wise thing to do is not to put all your eggs in one basket. Its better to have a well-balanced portfolio and take profits when the time is due.