Selection of good scrips is more important for prudent investment. It is not always possible to time the market. Timing is more important for speculators. The genuine investors need select good scrips on basis of knowledge and experience. One may select one or two leading scrips and invest in these regularly on monthly or quarterly basis. There is no need to monitor timing. Regular investment at fixed intervals will lead to averaging of purchase price over a period of time. After a reasonable span of five to ten years, the investor will gain substantially from capital appreciation, bonus shares and stream of dividends.
It's not possible to make it big without acquiring very sound grasp of technicalities of share market investment and it needs a lot of patience and determination on th part of the persons interested.
There are basically two techniques- Fundamental analysis for selection of scrips and technical analysis for timing. a combination of two gives better results. But long term investors can select good scrips and invest regularly monthly or quarterly. This will do away with need to time the market. The high or low prices will be averaged and the investor will reap excellent benefits in long run. Timing is more important for speculators as contrasted with investors.
chinmoymukherjee wrote:
[quote]I don't have much faith in technical analysis although some investors who are keen to make money in quick do prefer it![/quote]
An individual busy with his own profession will find hardly any time to watch minute to minute or even hourly movement of stock prices and indulge in short term share trading. Many earn by buying and selling the same day. But long term investors do well by selecting blue chips wisely and then invest at regular intervals for long term.
I think the situation prevailing in the stock market has very tellingly emphasized the importance of timing! Those who hesitated to off-load their holdings in a bull market are now ruing their decisions!
chinmoymukherjee wrote:
[quote]I think the situation prevailing in the stock market has very tellingly emphasized the importance of timing! Those who hesitated to off-load their holdings in a bull market are now ruing their decisions![/quote]
Timing is significant. But it is more significant to choose shares. In Boom times, many worthless shares also are in lime light. These so called penny stocks hit the investors very badly and too soon. These just become invisible. If you have selected good scrips, and even if failed to sell at high price, you may still wait but bad scrips will take you no where.