How to invest in current market conditions?

Published: July 24, 2013 at 5:31 pm

Last Updated on

Does this question sound familiar? Bet it does. This is probably one of the most popular questions asked in any investor meet or television show.

qmarkThe answer is surprisingly simple and the reaction to the answer, in most cases, unsurprisingly indifferent.

In academic circles we have a saying. ‘No question is silly. However, some answers can be’.

So assuming we believe in this saying, is titular question silly or stupid? NO

So what is the answer?

The rules of investing and therefore the answer to this question is independent of current market conditions

Join our 1300+ Facebook Group on Portfolio Management! Losing sleep over the markt crash? Don't! You can now reduce fear, doubt and uncertainty while investing for your financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community
  • Meaningful Investing requires:
    • a goal and a time frame
    • a knowledge of different kind of risks
    • an understanding that exposure to a different asset classes (stocks, bonds, gold etc.) will reduce portfolio volatility
    • diversification within an asset class
    • there is a couple of more things like rebalancing. However, this should do quite well for a start.

End of answer.

If investors do not understand this answer, they have two choices and only two choices:

  • Learn. It will take a little bit of time and consistent effort.

OR

  • Get professional help. Consult a good financial planner. The fee that you pay will be worth it. You can choose to remain ignorant, provided you trust the planner and implement his/her advice.

Do you agree that the reaction to this answer will be unsurprisingly indifferent?

~~~~~~~~~~~~~~~~~~~~

  • I ask you, ‘how to run a marathon?’
  • You tell me, ‘you need to train for many months. Starting with short distances and then gradually increasing the distance’.
  • To this I say, ‘that is fine. Just tell me how to run a marathon?’
  • How would you react?
Do share if you found this useful
Join our 1300+ Facebook Group on Portfolio Management! Do not lose sleep over your bleeding portfolio: Learn how to reduce fear, doubt and uncertainty while investing for financial goals! Sign up for our lectures on goal-based portfolio management and join our exclusive Facebook Community

Hate ads but would like to support the site? Subscribe to our ad-free newsletter and get beautifully formatted full articles delivered to your inbox!

About the Author

Pattabiraman editor freefincalM. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. since Aug 2006. Connect with him via Twitter or Linkedin Pattabiraman has co-authored two print-books, You can be rich too with goal-based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management. He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice.
He conducts free money management sessions for corporates and associations on the basis of money management. Previous engagements include World Bank, RBI, BHEL, Asian Paints, Cognizant, Madras Atomic Power Station, Honeywell, Tamil Nadu Investors Association. For speaking engagements write to pattu [at] freefincal [dot] com

About freefincal & its content policy

Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on developments in mutual funds, stocks, investing, retirement and personal finance. We do so without conflict of interest and bias. We operate in a non-profit manner. All revenue is used only for expenses and for the future growth of the site. Follow us on Google News
Freefincal serves more than one million readers a year (2.5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified from credible and knowledgeable sources before publication.Freefincal does not publish any kind of paid articles, promotions or PR, satire or opinions without data. All opinions presented will only 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 investingThis book is meant to help you ask the right questions, seek the right answers and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now. It is also available in Kindle format.
  

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 low cost! Get it or gift it to a young earner

Your Ultimate Guide to Travel

Travel-Training-Kit-Cover-new

This is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when traveling, how traveling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for Rs 199 (instant download) 

Free Apps for your Android Phone

Comment Policy

Your thoughts are the driving force behind our work. We welcome criticism and differing opinions.Please do not include hyperlinks or email ids in the comment body. Such comments will be moderated and I reserve the right to delete the entire comment or remove the links before approving them.

10 Comments

  1. I would say “Run with your legs” and experience even though 100 people can say how to run its you have to experience.. Similar in case of investing.. Learn and come up with your own strategy.. what works for you can never work for others.. and you cannot ask anyone after 20 years or 30 years why things did not work the way you planned.. so be accountable and learn abt finance to the level what you should know and invest.. After all working till 58 is also not bad if your have passionate to work.

  2. This post is very interesting and eye opener in precise manner. Dear Sir your post is too long some time. I like this post it is too short with behind lot of answer.
    This post is awsome.

Leave a Reply

Your email address will not be published. Required fields are marked *