Are you waiting for a correction to invest?

The 5 Minute Wrapup, On This Day - 16 January 2010
Are you waiting for a correction to invest?
Since the current rally began in March 2009, we have seen the Sensex gaining around 80% till date. What is more, of the eleven months since then (March 2009 included), the index has clocked positive gains in eight. Now after a strong bull market run like this, it is pertinent that investors start fearing a sharp correction in stock prices.

And you might be one of them! After all, that's a normal way of thinking after such bull runs and especially now when concerns still surround the global economic recovery.

We all fear corrections. And we all feel the ardent need to do something when a correction like event strikes, even if we expect it to be just a minor one. Like selling some stocks, fearing the markets might go down even further.

But then, we at Equitymaster believe that after the sharp rise in stock prices we saw in 2009, a correction this year should be expected and not feared. Corrections are just a normal part of stock markets and do not alter the overall bull market trend. And given the way India's economy and companies are evolving; the markets will definitely be in for a good time (notwithstanding the normal hiccups) over the next 5 to 10 years.

One must never try to time a correction. It is nearly impossible. Anyone can give into fears, pessimism, and crowd mentality. But what distinguishes a successful investor is discipline and patience.

Investing systematically and in good quality stocks, without trying to time the market or fearing a correction, is the way to go.

Are you waiting for a correction to invest?