HAVE A LONG TERM APPROACH IN THE CAPITAL MARKET
Persons desire to make money in the capital market in a very short time. But it is advisable to have a long term approach. This has been discussed in an article in The Week magazine of Dec 16, 07. It is very difficult to forecast in advance, the movements of prices in the market, for investing or disinvesting at those favourable times. When we invest in equity, we are in fact a partner of the entrepreneur in his business. Also in any business there are ups and downs, due to internal and external factors. Therefore, we should analyze and evaluate various businesses, and invest in suitable ones on long term basis to earn more, compared to those trading on short term basis. Normally an investor should have the expertise and time to study for this purpose. But now mutual funds are safer avenues for investment, including the Systematic investment plan, where cost gets averaged out, volatility is managed and money is earned. It is regular, and timing is of no concern. In any case timing is a risky affair, since returns come in spurts. Even the so called experts fail in this respect. Therefore the common man should not speculate and should adopt the long term approach.