The New Year is here and the stock market has already started buzzing with excitement. Investing in the equity markets must always be a planned move to counter any negative market sentiment and increase chances of successful returns. The stakes are even higher in 2014 as the country is going to witness Lok Sabha Polls in the next four to five months. With a chance in the central government, new policies may get implemented and a new market sentiment may suddenly boost many dormant sectors. Here are some recommendations that one can do to plan the equity investments for 2014.
Learn More on Investing: Educating yourself on the latest developments and intrinsic details of investing is a good step to usher in the New Year. Irrespective of whether you are a new investor or someone who has been investing for a long time, there is always room to learn and educate about various aspects of investing. Apart from learning about investing, it is essential to understand the basics of economy. In this day and age of global economic sluggishness the market fundamentals can sometimes behave indifferently. If you have a fair idea about investing and the global economic outlook, chances are that you are more likely to take better investing decisions for all your equity market related investments.
Invest in Mutual Funds Using Systematic Investment Plan (SIP): A lot of people enter the equity bandwagon thinking they would make substantial gains in a short period of time. While the equity market has given double digit returns in the past that have been adequate to cover for the rising inflation, unless one knows the market timing the gains can be hard to come by. The compound annual growth rate or the year-over-year growth rate of an investment has been a roller coaster ride for the past six to seven years. Considering that the sensex corrected nearly 21% between January 2008 and December 2011 and then rallied 11% till March 2012 and corrected 10% again makes a point for timing the market.
Some people who entered the market in a rally would have made better gains than the ones entering in a bearish phase. Systematic investment plans rule out all such timing ambiguity and offers easy investment options as per your choice either weekly, monthly or every quarter. Since 2014 is an election year, the daily news and events are likely