It is simply impossible to time the market. Investors who have tried time and again to time and again to time the share market have simply failed, whereas investors who focused on investing in quality businesses have always succeeded.
According to share market experts, many stocks have bottomed out especially in the small-cap and mid-cap stocks. Large-cap stocks too have corrected significantly. In case you have already invested in the good quality business, this is indeed the best time to average your investments in the share market.
Here are the top reasons why:
Reason 1: Reduction in corporate tax rates will boost market sentiments
Finance Minister Nirmala Sitharaman on 20th September 2019, reduced the effective corporate tax rates for domestic companies to 25.17 percent, inclusive of all cess and surcharges. This move is will make not only make Indian companies competitive globally but also beat the current slowdown in the economy as well as boost the market sentiments.
Reason 2: US and China are making goodwill gestures
Recently China and the United States had “constructive” discussions on trade in Washington. This move is expected to bring some respite to trade war between USA and China. This will improve market sentiments further as over the last few months US-China trade wars had hammered global stock markets badly, triggering a sell-off in Indian markets too.
Reason 3: Rollback of FPT tax surcharge
Government has rolled back the tax surcharge announced in the Union Budget for foreign portfolio investors (FPIs) with an income of more than 2 crores. Ever since the surcharge was announced in July, an estimated $3 billion flowed out of the Indian market with FPI’s turning net sellers in the Indian share market. Experts believe this rollback move by the government could turn foreign investors once again bullish on Indian share markets.
Reason 4: Attractive valuations of stocks in Indian share market
Given the corrections in the Indian share market over the past several months, several good businesses are currently available at attractive valuations.
To give you a brief idea let’s take a look at some of the stocks In Indian Share market which have corrected significantly:
The above stocks are few examples just for your reference how most of the stock in the Indian share market has corrected over the last few months.
To conclude, this is indeed the right time to average your investments in the share market. Remember by averaging your costs in good quality stocks you are not only reducing your investment cost per share but also the risk.