What is the Right Time to Invest in Stocks?

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The continuous dilemma that investors are often plagued with is when to invest in the stock market. Investors may question whether the time in a particular trading day is “right” to buy or sell stocks, or they may take a more general viewpoint and think of whether a time of year or during a certain event is the “right” time to trade in the stock market. 

Whatever you think about the “right” time to invest in the share market, given the unpredictable nature of the stock market, there is nothing such as a right time to invest in stocks. Yes, many indicators make stock investing give you potential returns, and these may be considered related to the “right” time to invest in stocks. 

The Right Time to Invest in the Share Market

If you have heard anything to do with the share market, you should know that the stock markets are inherently volatile and dynamic places. Prices may go one way when the opening bell rings, and a minute later they may swing another way. If you are a true investor in the stock market, you will pay heed to the words of the investing stalwart, Warren Buffet who says, “Investing is about TIME in the market and not TIMING the market”. So, if you want stock investment to work for you, you should first consider your investor behaviour. 

The right time to invest in stocks has as much to do with your own risk appetite, time horizon for investment, and investing patterns. Once you know how the stock markets work, you can choose stocks that you believe may be potentially promising for returns. Besides evaluating your own personality as an investor, there are other factors to consider while thinking about the “right” stocks. For instance, if you are not an investor with a high risk tolerance, you may think of investing in stocks at a time when you can invest with low capital and the promise of high returns. The time of investment is dictated by your own investor behaviour. 

Grasp How Stock Markets Work

If you want to know what the right time to invest in the share market is, then it is necessary to get a good grasp of how the stock market works. While you may not get an exact solution regarding the “right” time, you can study various indicators in the share market that can possibly yield promising returns from stock investment. Success in investing means that you should study the stocks you are interested in once you have identified them, learn about the factors that impact stock markets and prices, and know how to analyse the companies themselves. For example, if you are an investor who has capital to spare and is not risk-averse, you may think the right time to invest is any time that a blue chip stock drops in price. You may also go ahead and invest when a prospective IPO comes out. 

The “Right” Time of the Day to Invest

Some traders and investors consider the right time to invest in the share market aligned with the time of the day. Typically, when the stock markets begin their trading day, they take a little time to react to any market news that has transpired after the close of the previous trading day. Therefore, it is considered optimal to wait to make investments till news comes out properly and stock markets have had a chance to react. It is also believed that stock market volatility and the trading volume of stocks tend to wind down within a few hours after the markets open. Given all this, nothing is cast in stone in the stock markets and if you want to invest, the “right” time is when you have done enough research on a stock and then decide to invest. 

When to Invest

In an ideal world, stock investment says that you should invest when prices are low so you can earn profits when they become high later. Also, when stock prices are low, you can technically buy more of the stock. However, if the stock market was so predictable, then you wouldn’t have to ask the question, “When is the right time to invest in stocks?”, as you would have your answer. The fact is that the stock market is an unpredictable place and if you buy a stock that is low in price thinking it will yield returns when it rises, you may be farther from the truth. The stock may remain low for a long time, and you have no way of knowing when it will rise. 

Typically, stock markets react in positive ways when positive news breaks out and in negative ways when negative news is released. You may want to base your timing on such factors, but these are not foolproof methods. Generally, when stocks of solid companies, those with robust fundamentals, are invested in, they tend to yield promising returns if held for the long term. Additionally, the right time to invest could also be when you see an undervalued stock of a solid company. Such stocks are low in price as the market has not yet realised their inherent true value. These stocks may potentially rise over the long run once the market acknowledges their actual value. 

Concluding Notes

The “right” time to invest in the share market is after you have done your research into the market in general, and into the particular stocks you have identified to invest in. Once you have found out all that you can about a company regarding its financials, past performance, and other fundamentals, you may find that’s the right time to go ahead and invest. These days, with online investing and trading, you can catch prospective opportunities for investment from the comfort of your own home. You can invest at any time and from any corner of the world. This makes you make the most of the investment opportunities that come your way. Thus, you can select your own “right” time to invest based on different factors that suit your individual requirements. 


*Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing. This content is for educational purposes only*

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