9 charts that will tell you about the perfect time to buy stocks

Timing the market is always tricky. Buying on dips is advisable, but the move can backfire. Buying in a momentum-driven market may work out, or may not. ET Wealth analyses market dips and rallies in the past to figure how investors have fared in different scenarios.CHANGE IN 3 MONTHSThe 3-month performance tables indicate that investors typically made healthy returns on buying on a brief rally or momentum in the market. Even when markets have surged more than 30% in 3 months, investors have clocked decent returns for the subsequent 3 months.Market dips or rises more than 10% in 3 monthsInvestors have 65% chance of making a profit if the market rises more than 10% in 3 months 63854344 Market dips or rises more than 20%A 20% rise provides a better chance of making profits after 3 months. 63854352 Market dips or rises more than 30%Investing after the market dips 30% over 3 months could leave you with equal odds of making a profit or loss. 63854357 CHANGE IN 6 MONTHSSharp downturns over a 6-month period have provided better buying opportunities for investors. The upside potential is higher when markets have tanked 20% or more.Market dips or rises more than 10% in 6 monthsInvestors have fared well when they have bought after a 10% uptick over 6 months. 63854363 Market dips or rises more than 20%The odds of making a profit after a 20% dip or gain are fairly even, but gain is more when buying after a dip. 63854365 Market dips and rises more than 30%Investors have a greater chance of making a hefty gain if they buy when the market falls more than 30% in 6 months. 63854385 CHANGE IN 12 MONTHS30% or sharper market cuts over 1 year have been strong cues for buying, with hefty returns generated in 12 months after the slide. A lower market downturn has not always yielded good opportunities over this timeframe.Market dips or rises more than 20% in 12 monthsInvestors have made more gains when buying after a 20% uptick over a year than on a dip. 63854371 Market dips or rises more than 30%Chances of gain increase substantially when buying after a 30% or higher dip in the market over 1 year 63854376 Market dips or rises more than 40%The odds are overwhelmingly in favour of buying after a 40% or higher slide in the market over 1 year, with potential for outsized returns. 63854381 Data is for BSE 100 index over past 20 years.

from The Economic Times https://ift.tt/2qP2chg