Taking the global queue, the Indian Stock indexes have plunged and everyday finding new low. Informed experts opine that the bear phase is ushering. Everybody is busy with all their wisdom, calculations how long the bear phase will last. No doubt it is pertinent question. The investors have deserted the market, without a sign of returning early. The day traders are trying hard to recover their loses. The general feelings of payment crises under existing circumstances is not ruled out. News are there as brokers committing suicides. Obviously it transpires that they did so apprehending trouble due to non payment of their dues. The Finance Minister assured neither Indian Banks nor Indian burses are under any sort of threat. Let us trust him and raise no question.
Whenever the bear phase users in the market , you know, people start guessing the bottom. Because the bottom offers ideal time to enter the market. But most of us, keep guessing but can never identify the true bottom. Better not to be frustrated for our misjudgment. Go through the renowned financial papers , you find lots of experts are at par with us. Only thing they are never tired to find newer bottoms or highs. So, the bottom is relative factor. What is bottom for you is when you enter, start buying stocks. In case market further going down, if you are left with more funds , keep buying. Mind you there is a limit. Better identify the bottom, when the index start looking up for 2 or 3 successive days or for more. Sure, you do not buy the stocks at their lowest prices but near to it. There is no hard and fast rule that governs the movement of stock prices. But long watch of stock markets for decades suggests this mostly be true.
By the time the market finds new bottom, keep your money safe in the form of Bank deposits. The current interest rates are attractive. You can link your account with these deposits and take overdrafts (loans) bearing interest rate just 2 per cent higher than what you get on your deposits. That means you just pay 2 per cent interest on your borrowed fund. You pay interest for those many days till you repay the loan amount. It is continuous process, since your account is linked with deposits, you can draw overdrafts as many times as you like, or your limit permits.
When market favors buying , take overdraft and buy. Keep in mind this works when you are buying for short to midterm. For your long term investments better encash your deposits and invest.