There are numerous factors you need to consider when making an investment decision. “Investment Timing” is one of them. I would rather go steps ahead to say that it is “the most important” decision you need to make while undertaking any Investment decision. Investment Timing Strategy is thus a very crucial in your overall success as an investor.
Well, lots of people who invest or look forward to invest are often confused and bewildered about when is the right time to invest so that they can churn out maximum profits. Actually you do not invest in such a time which has a negative effect on your returns or profit margins. You would never want that your investment is giving you losses. Investment Timing Strategy here plays a vital role in determining your overall profits.
So in order to come up with an Investment Timing Strategy it is required that we first segregate the type of investors. That is to say that for each group of investors there would be a different Investment Timing Strategy. They need to invest differently. For this very reason I have divided the investors in two categories. One is the experienced investors who have been investing earlier also. And the second are those investors who are fresher and about invest for the first time.
Thus you should first choose your category of investor and then accordingly adopt the Investment Timing Strategy. We will elaborate on Investment Timing Strategy for both these investor groups.
First let us discuss the Investment Timing Strategy for the Investors who are fresher and investing for the first time. Practically speaking there is no good time or bad time for investment for the first time investors. So if you are a first time investors you can start investing at any time. But to keep things under your control you can adopt a systematic investment approach for investing in equities and commodities rather than following a lump-sum approach of investing.
The important point here is that you to start investing rather than wait for the stock prices to fall to the lowest. There would be no such time as an ideal time for investment. Similarly if you want to invest in a real estate you cannot wait until its prices fall. Moreover you cannot manufacture an economic situation when real estate prices are at its lowest. What you can do is to buy and hold a property till it gives you good returns. Likewise you can invest in Term Deposit (with a Bank), Debt Instruments and Bonds without waiting for their interest rates to rise.
But for those investors who have already done investment previously can adopt an Investment Timing Strategy for risky instruments like equity and commodity. For example such investors can invest when the stock and commodity prices are falling. So buying when the stock prices fall is the best Investment Timing Strategy for them as it leads to maximize their returns and increase the profit margins. As they have already invested previously, they are in a position to give themselves time for a favourable market condition. But for Mutual Funds investment they too can adopt the systematic investment approach and does not require to hold back their investments.
Thus we see that Investment Timing Strategy is a crucial factor in maximizing the overall returns of your investment. Though favourable Investment Timing is not under your control still you can stand to profit by adopting a rightful Investment Timing Strategy.