Will waiting really work?
Every waiting game has to end. In investing, merely waiting for the right moment will not deliver investment success. In this instance, most investors have been waiting since 2008 for one thing – the perfect moment to buy. The market bottoms of 2009 and 2011 did not give investors the sense of the perfect moment. With the nifty at 5300, investors continue to remain ponderous and lost. Finding the perfect moment happens through only one route. By venturing to invest and remaining in disciplined pursuit of great investments. The perfect moment can be found only if we accept that its pursuit is distinctly imperfect. So lugging along with a method, discipline and faith is the route to the perfect moment. You will realize the perfect moment either by instinct or in hindsight. As long as you made a difference to your investing, how you found it hardly matters.
When investor aversion to equities is at its peak, a bull market is born.
When costs rise, they exert severe pressure on corporate profits. The earnings (EPS) tend to be pressured across the board and investors tend to believe that valuations are stretched. While earnings outlook may look weak, the quality of earnings is actually better. Companies actively respond to the cost pressures through cost cutting, productivity improvement and business transformation. Normally, these moves tend to bring benefits into the bottom line with a time lag. Importantly, when the overall outlook improves, the hard measures always deliver handsomely to earnings. We seem to be in a phase when these tough measures are being taken continuously. Markets tend to take cognizance of future benefits much before they kick in. All the market needs are a few early indicators for evidence.
A cool head, a cash chest and a contrarian bent is what you need now.