Personal Finance Blog India –

This Is Why Market Timing In Equity Is Much Important –

This may be matter of debate whether Entry level in Equity market is important or not.This post is a small attempt to take a view on market timing,How & why its important to time the market to beat the inflation.

Please check out this image snapshot –

A- was in Dividend reinvestment while B was in Growth option of same fund.

Investor was invested in same funds on two different dates and different market conditions.We will convert dividend reinvested into growth to calculate the overall returns and fair comparison.

One can view that Investment A have provided around 12% returns within 3 yrs while B have provided only 4-5% returns within last 05 years.

Investment” A” though invested much later than “B” have provided investor with good returns.This was happened just because Market timing was superior in case of Investment “A”.Where as Investment “B” have not able to deliver returns of more than 5-6% in 5 years period.

Market Timing – By Luck Or By Intelligence

Most important question is how to time the market??Of course its not always possible to time the market.But whats ever it may be –  by Luck or by intelligence you need to do it other wise one will never beat inflation.

People presents different data of last 30-40 years to prove Equity as the best investment but as a retail investor I all find them useless as it won’t make any sense if Equity offered double returns after me…isn’t it??


Category: Mutual Funds


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