Timing of investment in equity market is simply not feasible. The most famous investors like Benjamin Graham, Warren Buffet, Charlie Munger, Rakesh Jhunjhunwala always advise against timing the market. So, what should a common investor do?
The two important things for common investors are to judge their own risk profile and to find their time-horizon. Risk profile means how much risk an investor can take. The time-horizon means how much time does he/she have to fulfill his target. Based on these two parameters, an investor must chose suitable mututal fund(s) and start investing through SIP route.
The basic advantage of the SIP is that an investor does not have to ponder over the suitable time to enter the equity market. At the same time, he can take advantage of the market downturn.
Summarising the above facts, I must state that an investor must not attempt to time the market. Investment in mutual fund must be initiated immediately through SIP route and the SIP must continue for at least five years to get real benefit.
Caution: Explosive. Handle with care.