Logic dictates that buying the lows will make you a lot richer than investing without much thought or analysis. Or, in Nick Maggiulli's own words, 'Why Buying the Dip is a Terrible Investment Strategy'. We have all heard stories of how friends and family bought so and so share - in the latest example, bought ITC at under 150 INR and sold it at above 250 INR - all within a year - giving glorious returns of 66%. This sounds like an investors fantasy. I looked at 10 years' worth of data from the BSE index to understand how much incremental I would have made if I invested monthly (on a random day of the month) vs on, say, a 90-day low. Scenario 1 A systematic investment plan that is set to buy the same number of units (the amount would differ) every month - on the 1st, irrespective of the market being high or low. Scenario 2 An investment strategy where you analyse the market and buy units every month, but what would seem like the lowest point in the month. Scenario 3 An in
The time vs money conundrum. This does sound like a jargon, albiet an intuitive one. In its most basic form, it's a question; what is more important to you, time or money? You will hear honest answers and dishonest answers from all kinds of people. But have you ever wondered how it applies in your life? Not in a finance class test, not while discussing earnings potential with your fellow investment bankers during Thursday drinks, but in your day to day life? I used to earn 20,000 INR (≈ $250/month) 10 years ago. I was a happy go lucky person, rarely thought about saving, but thought very much about being seen using the latest fragrance from Bath & Body Works. I used to spend my entire salary on fragrances (think amazing smelling candles and lotions), rent, food and commute. This went on for 3 years. I saved zilch, save for some sad and unused candles. I studied engineering, and nobody had told me the importance of saving money. I now wish there was a basic finance class for eve