Are you waiting for the market to fall? It can be an expensive mistake!

Published: August 31, 2020 at 12:08 pm

Last Updated on February 12, 2022 at 6:16 pm

Are you delaying your investments waiting for the market to fall again? Here is why waiting for the suitable time to invest in the market can an expensive and irreversible mistake.

When the Nifty crashed by 37% in March 2020, everyone feared the worse and with good reason. We expected a further crash or at least a sideways movement at that level (mid-7000). As usual, the market has a mind of its own and defied all expectations.

The nifty moved up 53% since then and several mutual funds have registered healthy gains: These 10 mutual funds gain more than 75% after the market crash. Those who were waiting for “lower levels” to invest have to deal with rue and regret. We can only hope the regret is over the right reason: money lost in the market can be gained back but time once lost is lost forever.


Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥

The market in an intractable beast and investor assume they can actually slip in between raindrops without getting wet.  Dolly Parton could not have said it better: “if you want the rainbow, you gotta put up with the rain”.

Stock market risk must be actively managed. There is no question about it. However, to assume it can be accomplished by waiting for the right time to invest is unsubstantiated nonsense.  This is like trying to build a sandcastle when the waves have receded assuming it will never come back in strong. Some investors believe they can ‘see’ a big wave and safely relocate the castle.  It is like waiting too long to go on a holiday only to find the world under the grip of a pandemic.

No one knows when the market would fall again or rise again.  There is a simple way for a normal person to profit from the stock market: Have a balanced portfolio to reduce the risk of loss and regularly accumulate mutual fund units or stocks so that when there is a big upswing a significant profit can be made (absolute gain not percentage). If we can stay invested through 2 or 3 bull runs our life will change forever.

All it took was one bull run to change my life:  Lessons learned from my investing journey. The crash reduced my returns but not my financial independence status: My retirement equity MF portfolio return is 2.75% after 12 years!. I have regularly investing throughout this crash and eliminated my losses. See:

Investors can manage risk systematically and build a robust portfolio with three simple actions

(1) decide what asset allocation is necessary for your goal now and in future. The Freefincal Robo Advisory Software Template automates this process of goal-based asset allocation.

(2) Rain or shine. An upmarket or down market, invest regularly – each month if salaried and at least each quarter if you are an entrepreneur. SIP or manual investing does not matter. See: Instead of a mutual fund SIP can I invest on my own each month? Log your investments and increase them as much as possible each year. See What is your investing growth rate?

(3)  Rebalance your portfolio once a year. You can do this is there is a sudden market upturn or you can do it the same month each year. As long as you do it once a year risk will be contained by a significant extent. See:  When should I rebalance my portfolio? Also, see: Forget tax and exit loads, this is why your portfolio should be rebalanced each year.

This is good enough for all investors. In addition, if you wish to tactically enter and exit using technical indicators please recognise that it not for higher returns but for lower risk. See: This “buy high, sell low” market timing strategy surprisingly works!

Thus there are only meaningful ways to invest: (1) invest regularly and manage risk regularly or (2) invest and manage risk tactically. Those who have a tactical method in place will not sit and wait for some Nifty level to invest.

The idea behind both methods is to continue investing no matter what. That is “investing with a system in place”. This is not the same as “systematic investing” as fund houses would have you believe.

Market levels are not relevant to your next investment. Investing “extra” on “dips” is fine as long we do not attach any superiority to it as shown before: Want to time the market? Then do it right! Buying on dips is not timing! and Buying on market dips: How effective is it?

The only way to sleep in peace is the thought that risk associated with our money in the market is reasonably managed. Worrying about when to invest next and what would happen to that investment is of little use.

Do share this article with your friends using the buttons below.

🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
We also publish monthly equity mutual funds, debt and hybrid mutual funds, index funds and ETF screeners and momentum, low-volatility stock screeners.
Follow Freefincal on Google News
Follow Freefincal on Google News
Subscribe to the freefincal Youtube Channel. Subscribe button courtesy: Vecteezy.
Subscribe to the freefincal Youtube Channel.
Follow freefincal on WhatsApp Channel
Follow freefincal on WhatsApp
Podcast: Let's Get RICH With PATTU! Every single Indian CAN grow their wealth! 
Listen to the Lets Get Rich with Pattu Podcast
Listen to the Let's Get Rich with Pattu Podcast
You can watch podcast episodes on the OfSpin Media Friends YouTube Channel.
Lets Get RICH With PATTU podcast on YouTube
Let's Get RICH With PATTU podcast on YouTube.

  • Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
  • Have a question? Subscribe to our newsletter using the form below.
  • Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.

Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!

About The Author

Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter(X), Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.
Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter the market condition is!! Watch the first lecture for free!  One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course!  Increase your income by getting people to pay for your skills! More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!   
Our new book for kids: “Chinchu Gets a Superpower!” is now available!
Both boy and girl version covers of Chinchu gets a superpower
Both the boy and girl-version covers of "Chinchu Gets a superpower".
Most investor problems can be traced to a lack of informed decision-making. We made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, what would it be if we had to groom one ability in our children that is key not only to money management and investing but to any aspect of life? My answer: Sound Decision Making. So, in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parents plan for it, as well as teaching him several key ideas of decision-making and money management, is the narrative. What readers say!
Feedback from a young reader after reading Chinchu gets a Superpower (small version)
Feedback from a young reader after reading Chinchu gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.
Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Do you want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & its content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
Our publications

You Can Be Rich Too with Goal-Based Investing

You can be rich too with goal based investingPublished by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want Gamechanger: Forget Start-ups, Join Corporate and Still Live the Rich Life you wantThis book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new This is an in-depth dive into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)