How to make money in current volatile stock market? Don't time it, spend more time in it With a well-structured investment plan, market volatility becomes less emotionally taxing. Youre no longer caught in the exhausting cycle of trying to predict market movements. This emotional stability is particularly valuable in todays markets, where volatility can test even the most seasoned investors resolve
Dhirendra Kumar
CEO, Value Research
Time is the friend of the wonderful business, the enemy of the mediocre,” said Warren Buffett. If we replace the word ‘business’ with ‘investor’, it would be of greater relevance to all of us today. As the stock market swings between dramatic highs and lows, many investors are feeling the familiar itch—timing the market. It’s not every day that we experience the thrill of market movement of thousands of points within weeks, sometimes days. At such a time, it’s tempting to think we can outsmart the market by buying at the bottom and selling at the peak. This age-old temptation becomes particularly acute when we see the market making sharp moves, such as the recent surge after the Maharashtra election results.
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;} However, here’s the sobering reality. Market timing is just as dangerous today as it has always been, perhaps even more so now, given the complex factors driving the current market movements. While the Sensex’s sharp recoveries might make timing appealing, they highlight why it’s such a risky strategy.
Consider the recent market behaviour. The investors who panicked during the dips in October and November might have missed the subsequent sharp recovery. This pattern has played out repeatedly over the past six months, with the index showing multiple sharp drops, followed by equally dramatic recoveries. Each of these swings represented a potential trap for market timers.
The challenge lies not just in predicting market movements, but understanding the increasingly complex web of factors influencing them. Today’s markets respond to domestic economic indicators, global geopolitical events, policy changes and institutional money flow. Even seasoned market experts struggle to predict how these factors will interact to move the market accurately.
The speed of market movements makes timing particularly dangerous in the current environment. The digital age has accelerated the pace of information flow and market reactions. When you think you’ve spotted a trend, the market has often already priced it in. Those who attempt to time these movements frequently end up buying high and selling low, which is the exact opposite of their intention.
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Instead of trying to time these volatile markets, investors would be better off focusing on time-tested principles:
First, maintain a disciplined, long-term investment approach. The market’s journey over the years shows that the long-term trend has been upward despite short-term volatility. Second, use SIPs in mutual funds to average your purchase prices over time. This approach automatically takes advantage of market dips without requiring you to predict them. Finally, focus on asset allocation rather than market timing; ensure your portfolio’s risk level matches your investment horizon and goals.
The psychological benefits of such a systematic approach cannot be overstated. With a well-structured investment plan, market volatility becomes less emotionally taxing. You’re no longer caught in the exhausting cycle of trying to predict market movements or lying awake at night wondering if tomorrow is the day to buy or sell. This emotional stability is particularly valuable in today’s markets, where news-driven volatility can test even the most seasoned investor’s resolve. Moreover, a systematic approach frees you up mentally to focus on more productive aspects of financial planning, such as tax efficiency, estate planning, or identifying long-term investment opportunities in emerging sectors.
Remember, successful investing isn’t about predicting the market’s next move. It’s about staying invested through market cycles, maintaining discipline when others are panicking, and letting the power of compounding work in your favour. The current market volatility might make timing seem attractive, but it’s precisely during such periods that sticking to long-term strategy becomes crucial. As Buffett observed, the stock market transfers money from the impatient to the patient. In today’s volatile environment, this wisdom rings truer than ever. The real question isn’t when you should buy or sell, but whether you are invested in line with your long-term goals.
For most investors, the answer to market volatility isn’t timing; it’s time itself. Let investment horizon, not market movements, dictate your strategy. In the end, time in the market beats timing the market, regardless of how tempting the market swings appear.
The Author is CEO, Value Research
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This story originally appeared on: India Times - Author:Faqs of Insurances
