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16 Apr 2020 by Pradeep U
Waiting for the Good News to Invest in the Share Market in India?

Stock markets in India have experienced a mild recovery following the brutal correction in March.

If you look, Sensex has recovered by 16-18% from the bottom, but they’re still trading lower by 25-27% than what they were trading in January 2020.

This means many of the best stocks to buy for the long term in India are still available at good bargain prices. However, many investors in India are still unsure whether it is the right to invest in the share market or wait for the good news to come in.

This reminds me of a friend of mine.

Ajay, a close friend of mine, purchased a brand-new car last year but hardly drove it. Every time I go to meet him, I see the car parked outside his house all covered up with tons of dust.

Whenever I ask him if he drives the car, his reply would be “Roads are too congested. I hate driving in this bumper to bumper traffic. I will drive the day there are fewer cars on the road".

So basically, my friend is waiting for a situation which, according to him, would be an ideal condition for him to drive.

Such a scenario may be impossible in a city like Mumbai, which is growing in terms of both population and cars day by day. Hence, I don't think he will be ever driving his car.

The reason why I am talking to you today about my friend Ajay is that just like him, I often come across many investors who are mostly waiting for the news (the good news) or the perfect time before they start investing in the stock market in India.

Instead of capitalizing on the current opportunity to invest in the share market in India, many investors prefer to adopt the wait and watch mode.

Some common arguments which I hear from such stock market investors are:

“The number of Coronavirus cases both in India and USA have escalated sharply in the last few days. So, there is definitely more downside to come in the markets in the coming days.”

“Global rating agencies have cut India’s GDP growth forecast to new lows.”

Few questions that every stock market investor need to ask themselves:

"When Indian indices, i.e. Sensex and Nifty were trading at all-time highs in Jan 2020, were you aware of the fact that stock markets in India would correct by 30% or more in just three months?"

“If you missed out forecasting on one of the biggest stock market corrections in January, what makes you think you will be proven right about the looming correction in the market?”

Yes, the road ahead in the near term may look clouded with some uncertainty, but stock markets in India will ultimately get over it as they have always done in the past.

Data of stock markets reveal that every bear market phase has been followed by a recovery and then a prolonged phase of a bull run.

As compared to the USA or even many European countries, India has gone a step ahead in its efforts to combat the coronavirus in the form of strict lockdowns and sealing Covid-19 hotspots. Even the number of fatalities is less in India as compared to other countries across the world who are also battling the pandemic.

Read more about strengths of India which can help the nation overcome the current crisis at the earliest.

Hence, the good news may come earlier than expected. But instead of waiting for them to come on your lap, you should look at the opportunities that the current Indian stock market offers to you.

Stock markets always discount the future

The biggest mistake many investors make is to wait for the markets to bottom out in expectation of the good news to justify their reason to start investing.

As wisely said by Warren Buffett at the peak of the global financial crisis in 2008, “If you wait for the robins, spring will be over.” Don’t let a short-term crisis throw you off your long-term financial plan.

Many of the best stocks to buy for long term are available at cheap valuations

Don’t forget that many of the best stocks to buy today for the long term are currently available at significant discounts and may be priced higher once the tide changes.

So, get started with your stock market investments now. Remember good things come to those who wait but only the things left by those who hustle.

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