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Why is the best time to invest now?

The stock market is cyclical. Market dips follow market hikes and vice versa. Timing the market accurately is nearly impossible, and attempting to do so might lead to missed opportunities.

Thus, the best time to invest is now with a long-term investing strategy.

Why long-term? Downturns are typically short-term glitches, and you are likely to recover losses by participating in the eventual market growth.

Also, when the market dips, you end up buying more units at the same price. This reduces your average cost per unit over time.

For instance, your fixed monthly SIP (Systematic Investment Plan) amount is ₹10,000, and the unit cost reduced from ₹50 to ₹40, then the number of units increases from 200 (₹10,000/₹50) to 250 (₹10,000/₹40). Thus, market dips offer investment opportunities.

Where can you invest your money?

Now that you know when is the best time to invest, let’s delve deep into the common investment avenues.

Depending on your risk tolerance, you can opt for a direct or indirect market exposure. Once you are clear on this, when to invest money becomes less about timing the market and more about investing according to your preferences.

Direct exposure: Equity
Direct Equity investments require an in-depth understanding of the market. It also demands extensive research and knowledge of various geopolitical and other factors. Thus, the best time to invest for seasoned investors in Direct Equity is also now.
A long-term investing perspective with sound market knowledge helps position your investments for growth.

Indirect exposure: Mutual Funds
Mutual Funds are a great starting point for new investors. They are managed by professionals and hence an ideal solution for a limited time and knowledge. Furthermore, they build diversified portfolios to facilitate exposures across asset classes through a single investment.
Notably, you can choose from various types of Mutual Funds depending on your investment horizon, end goal, and risk appetite.
So, when to invest money in Mutual Funds? No doubt, it's now.

Things you should keep in mind before investing?

Once you know when to invest money, there are a few things that you should keep in mind to ensure your investing strategy aligns with your financial needs.

Long-term investing
Wealth-building is a prolonged process. You need to give your investments sufficient time to grow. Thus, adopt a long-term investing approach for goals that are due over time. However, for goals you want to achieve in the short term, you might want to explore short-term Mutual Funds.

Risk tolerance
Just like knowing the best time to invest is important to start investing in time, identifying your risk tolerance is equally essential for making the right investment choices. For example, in the case of Mutual Funds, Equity Mutual Funds carry more risk than Debt Mutual Funds.

Diversification
Ensure to have a diversified exposure across different companies, sectors, and asset classes. If you are unsure how, consider investing in Mutual Funds. They are professionally managed by fund managers who strive to achieve diversification. This way, poor performance of a particular stock will have a less severe impact on your total portfolio.

Invest today and secure your tomorrow

The best time to invest is today. It’s now. Don’t wait for the markets to reach a particular low or high; it’s futile. You will benefit from the average cost of investing over time.

By investing now, you position your portfolio for long-term growth and accomplishment of your financial goals.

The sooner you start, the more time you will have to let your investments grow, accelerating your journey to financial independence.

Disclaimer: This article is intended solely for informational purposes. The views expressed in this article are personal. Axis Bank and/or the author shall not be liable for any direct or indirect loss or liability incurred by the reader arising from reliance on the content herein. Readers are advised to consult a qualified financial advisor before making any financial decisions. Axis Bank does not endorse or guarantee the accuracy of any third-party content or links included in this article.
Mutual Fund investments are subject to market risk. Please read all scheme-related documents carefully. Axis Bank Ltd. is acting as an AMFI registered MF Distributor (ARN code: ARN-0019). Any purchase of Mutual Funds by Axis Bank’s customer(s) is purely voluntary and not linked to availment of any other facility from the Bank. This content is for informational purposes only and does not constitute investment advice. Past performance is not indicative of future returns. Readers are advised to consult a qualified financial advisor before making any investment decisions. Terms and Conditions apply.

By Axis Bank Learning Hub Team