Timing considerations in investment policy
In a classic “Classics II – Another Investor’s Anthology”, there is a piece of wisdom by Benjamin Graham and David Dodd which every investor should read and re-read.
“The old rule for the ordinary investor was that he should buy sound securities when he had funds available. If he waited for lower prices he would be losing interest on his money; he might "miss his market," even if prices declined; in any case, he was turning himself into a stock trader or speculator. Much of this view retains its validity. However, the time when the investor should clearly not buy common stocks is during the upper ranges of a bull market. For most issues this is tantamount to saying that he should not buy them at prices higher than can be justified by conservative analysis-which is something of a truism. But, as we pointed out previously, this warning applies also to the purchase of apparent "bargain issues" when the general price level seems dangerously high.
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Additional Readings:
- ‘In India, there’s visibility of 8% plus growth for 10-12 yrs’ The markets at current levels look fairly priced. But investors should take the bottom-up approach.
Off-Topic Readings:
Parting Thought:
- We believe that according the name 'investors' to institutions that trade actively is like calling someone who repeatedly engages in one-night stands a romantic. - Warren Buffett
