Time to enter the market

When the market went down over a year back, we were scared to enter the market. After that slowly the market started moving up and it kept going up. Today it is still going up. The assessment of most of the market experts is that we have come out of recession and should serously think of entering the stock market.

Before we enter the stock market we should do some assessment of our own. First we should check what the market up’s and down have done to our current holdings. We should verify if the stocks in our current portfolios are worth what they were over a year back and also the outlook of the sectors in which we hold stocks.

If the stocks in your current portfolio are good and their sectors have a good outlook, but the stocks are being traded below the purchase price, on every fall in the market start buying in small quantities and bring down the average purchase price. But if the company’s fundamentals have changed or the outlook is not good then start getting rid of the stocks with every rise.

Also check your risk profile as of today, can you afford another fall in the portfolio value. If not think twice before investing more money in the market and get rid of the riskier stocks. Reassess you goals and decide the reason for investing in stocks and the period for which you plan to invest.

Managing equity investments is not easy, especially if we did not look at the portfolio for the past year or so. However, you should be prepared to reenter the stock market and give yourself a chance to recover from the shock. The time is ripe to juggle your portfolio and make money.