MYTH-14. STOCKS ALWAYS GIVE GOOD RETURNS IN THE LONG TERM
·
The catch is that
‘long term’ is never defined.
·
It can be
extended as per the convenience of the financial advisor.
·
Never try to time
the market for buying low and selling high always.
·
Booking profits
periodically is the only way to make money from a volatile stock market.
·
Smart investors, who move against the crowd during extreme situations, make good money.
· They prefer buying during a downturn and selling in a rally, by spotting the entry and exit points.
·
One simple way is to look at the valuation of the broader
market, as defined by its PE.
·
Keep building positions when the PE is ruling at low
levels,
· Start exiting when the PE has reached higher levels.
·
However, a lot of patience is required to implement these strategies.
· It should not matter whether this happens in a span
of 5 weeks or 5 months or 5 years.