Much water has flown under the bridge since the Silicon Valley Bank crisis happened. The markets behaved topsy turvy for a few days awaiting signals from the Fed meeting held last week.
When after many days of indecisiveness, S&P 500 Index staged a fine recovery on Friday, with only Financials and Consumer Discretionary being marginally negative, the most obvious thing in the minds of investors was whether markets’ bad run was over and perfect time had arrived to enter the stock markets.
Although there is no time when people should not invest in the stock markets, the best time is considered when the prices are comparatively low, as days of bottom fishing no longer exist. According to legendry investor Warren Buffett, it is far better to buy a wonderful company at a fair price than a fair company at a wonderful price.
A big chunk of the investors, including small and new generation retail investors, entered the markets during pandemic, when the markets were really low.. Successful investors do not look at what is happening now. They are only forward thinking.
The liquidity in the world is so high that global markets are not ready to crack big time. Every good correction is bought into. Further, Stocks have been trying to stabilize after Fed signalled that rate hikes could be near end.
The psychology of stock markets is that big players normally buy only the fear. They do not wait for economy to start doing well so that they can start buying. It is normally too late by then.
The only word of caution, enter with a plan. As the saying goes, a novice with a good trade plan often does better than an expert with no plan.
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