Buying at correction and selling on rise has been a counter-cyclical strategy designed to capitalise on temporary price dips in fundamentally strong stocks.
Buying at correction and selling on rise has been a counter-cyclical strategy designed to capitalise on temporary price dips in fundamentally strong stocks.The ongoing market correction might be that opportunity for which most investors in the market would have been waiting. Value buying could emerge after a brutual crash today or portfolios might bleed further. But is it really worth waiting for a market correction to buy stocks? According to CA Nitin Kaushik, waiting for a market dip is a losing game that most people can’t afford.
The Nifty50 clocked a 13-14% CAGR in the last decade, tripling capital of investors who stayed put irrespective of a rally or a correction. Those sitting on the fence for the last decade waiting for a “clean” entry have missed the bus, said Kaushik in a post on X.
Elaborating further, Kaushik said, "The math of delay is brutal: missing just the 10 best trading days in a decade can often cut your final portfolio value by nearly half."
The timing of entry into the market is considered the most important factor apart from valuations and stock movement among others.
Buying at correction and selling on rise has been a counter-cyclical strategy designed to capitalise on temporary price dips in fundamentally strong stocks.
But Kaushik has a different take on this.
"Most investors treat timing like a strategy, but it’s actually just an expensive form of procrastination that burns through your most valuable asset compounding time," said Kaushik in his X post.
"The obsession with the “perfect entry” is just a psychological shield to avoid the discomfort of actually putting money at risk," he added.