Personal Finance

Is It A Good Time To Invest ?4 min read

July 29, 2020
Good time to invest

Is It A Good Time To Invest ?4 min read

The best time to start investing towards your goals is now! In fact, the sooner you make the first investment, the greater would be your accumulated wealth. Along with that, you need to ensure that you don’t drop off before your goals are reached.

However, as you would have noticed from time to time, markets tend to go haywire; and so goes your emotion. And exactly at this moment, you question yourself “Is it a good time to invest?”. Definitely, the answer doesn’t lie in stopping/pausing your investment. Instead, you may consider a few strategies to get the best out of the situation.

Time in the market matters more than timing the market!

The attempt to time the market is something one needs to avoid altogether. The wait to catch a market bottom or the best NAV may be almost unending. Also, wealth creation is not a one-day affair. It is the result of dedicated investing that may extend even beyond 10-15 years.

Suppose, if Ramesh had started investing say Rs 10,000 every month 20 years ago, then (assuming an annual return of 12%) today he would be sitting at a corpus of around Rs 98 lakhs. On the contrary, if Suresh had started investing with the same amount 15 years back, he would now have accumulated only Rs 49 lakh. This shows that a decision to postpone investing for a mere 5 years can bring a difference of as much as Rs 49 lakhs to your overall wealth accumulation.

But this does not convey that Ramesh would have had only the good days in the market. In fact, wealth building is a blend of both ups and downs that happens in the market. If you stay invested during the tough times, then you get to enjoy the fruits of higher returns as the market recovers.

So, what’s the way out then?

Get your basics right! Invest in a mutual fund that matches your risk profile & investment timeline. This way you wouldn’t feel like quitting/pausing your investment when the fund value fluctuates. Additionally, become friends with your investment horizon! This way you would know how far you are from your goals and what has been your progress to date.

But what if I have a sudden need for cash?

Use an emergency fund instead of withdrawing funds that you have earmarked for specific goals. This allows you to stay invested for your long term goals and also fulfills your sudden requirement of money. You may even consider investing your short-term surplus in a liquid fund for this purpose. This way you earn relatively higher short-term returns and also enjoy the flexibility to withdraw funds as and when the need arises.

Also, get your asset allocation sorted!

Adjusting your asset allocation as per market movements might lower your chances of facing a higher risk. Initially, you may have planned to allocate 50:50 in equity and debt. But with market dynamics, the original ratios may have shifted. During the bearish phase, when your portfolio would have become debt-oriented, the best strategy might be to bring these ratios back to the original allocation. At this point, you may have to decide whether or not to stick to the same equity fund. If it hasn’t performed as expected, you may exit that fund and invest a lumpsum in a superior equity fund. Basically, your aim should be to keep the portfolio as per your risk profile.

How SIPs may help you to stay focused?

SIPs can be your go-to option to stay invested during the crisis. Many times, an effort to time the market to get the best bottom/top takes away the opportunity to create wealth. Instead, an SIP simply automates your investments and removes the fear and burden of investing. This way you get to buy more units of a superior fund when it’s available at lower NAV. Apart from doing SIP in your current portfolio, you may also spot other funds that you were waiting to invest in. This way you can start an SIP in those funds as well. At Paytm Money, you can start an SIP in your favorite mutual fund with as low as Rs 100 and grow wealth for your goals.


Wealth creation is a long term process. When you start off on this journey, keep your goals as a focal point. This will keep you motivated and committed to your investments.