The Sensex is at 60,000! Should you still invest?
Let’s cut to the chase. The Sensex, as of writing this article, has crossed 60,000 and is at an all-time high.
A lot of folks think that this is the wrong time to invest in the stock market, either by way of direct stocks or Mutual Funds.
But let’s get one thing - Equity investing is a long-term game. And if the stocks/mutual funds you’ve chosen are good, over a 5+ year period, you’ll generally get good returns!
“But the Sensex is SO high! And so is the Nifty! If I invest now, won’t I get my stocks/mutual fund units at an expensive rate?” you ask.
Today, they may seem expensive, and there may or may not be a correction (a fall in the values of the overall market). But historically, even if the market has fallen after such highs, it has bounced back in a couple of months/years, and surpassed the high again.
Basically, in the stock market, every all-time high is preceded AND followed by another all-time high.
Let that sink in.
Every all-time high is preceded AND followed by another all-time high.
Let’s look at a graph of the Sensex since it’s inception to see what I just said:
And here’s a graph of the Nifty:
Now how many all-time high’s do you see here? And do the so called “market corrections” look?
Merely blips, if you look at the overall growth of both indices.
Pretty much all indices follow the same pattern.
Another thing to observe is that if you choose any 5-7 year period from the inception of both indices, they will have given good returns.
Yes, markets fall. There is a correction. But historically, they’ve always recovered. While this isn’t the rule, that’s how it has always been.
So to answer your question about whether you should still invest in this market? Go ahead - if you’re investing for the long term, don’t overthink. Just choose a good company/mutual fund and put your money!
If you’re still worried about it, I will talk about an option called STP in my article next week, which will give you some more comfort if you’re worried about investing!
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