No. He may have panicked and bought again at 81,000 and felt good at 82,000! Or he might be cursing me for the WRONG advice – or wrong reading of the market. Later on, he is likely to tell me “You could have asked me to sell at 82,000 instead of 80,000”.
People anchor around round numbers like 75,000 or 80,000 – maybe because it is easy. Actually, this is just a number and has absolutely no significance in the life of an index.
Most of us know that saying “now the market will do this or that” makes no sense – however, it does attract a lot of readers who think that there is a simple answer.
Those who have been in the equity markets in the past 21 years (that is a long time is it not?) think the market is just a long, long bull market and there will be a few short dips of 2-3 months. None of them have seen a long bear market. Many of them do not even know that the market can go down.
In the long run for a person to make money, there is no great need to be able to predict how the market will move in the next month or next quarter. If they are optimistic about the prospects of the world or any one country in particular, they should just invest in the index of that country.
There are enough people who will tell you that people have lost money waiting for the market to change – and the opportunity lost while waiting is really huge.
If you are really a long-term investor please do not wait for the ‘Market to correct’ – it is difficult. Just start an SIP and keep investing REGULARLY. If you see the markets coming down, just put a lump sum into the same fund from time to time. This will ensure that you accumulate a decent time over the next few decades – and you will have enough money to meet your goals.
