Indian markets are hitting a new all-time high. At the time of writing this post, Nifty 50 was at 19,979 and Sensex was at 67,571 (on 20-July-2023).

And those who had the mazuma and valiance to invest in times of slipperiness (in March 2020 when Nifty50 made a low of 7610), their investments are once up increasingly than 160% at alphabetize levels in little over 3 years!

While all-time highs bring joy of rising portfolio values, they moreover bring a bit of worry. What if this is the top? What if markets fall from here? And that is the biggest issue (or facepalm things) with stock markets. As Ben Carlson says in this old piece (link) – One of the hardest parts well-nigh investing in the stock market is there is unchangingly something to worry about. This is true plane when things are going well, as they are now with markets at or near all-time highs.

But All-Time-Highs aren’t that rare. At least for growing economies like India. They can be scary for a few, but they are normal. And I know many investors may be wondering now whether to sell and typesetting profits now (and try to re-enter later if and when markets fall) or protract with their systematic investments or SIPs.

If you squint at market data, you will notice that generally, all-time-highs are followed by new all-time-highs. Kind of getting higher and higher with momentum. Of course, one day it will be the final new upper without which the market may fall or crash or whatever. But generally, markets making new all-time-highs doesn’t necessarily midpoint that markets have peaked and a correction is imminent.

Selling or sitting out (in cash) just considering your dear Sensex or Niftry50 is setting new highs might be a mistake. Your investment decisions should anyways not be governed just by market movements.

So what should investors do now as markets protract to party and make new all-time highs? Should they sell or Stay invested or alimony Investing more?

To be fair, nobody wants to leave the party when it’s on. Markets have been rising like there is no tomorrow. Making money from stocks seems easy these days. But this is a good time to take pause yourself and think longer. It is time to review. And if need be, take touching-up actions.

What should you do Now at All-Time-Highs?

If you have variegated goal (investment) buckets for variegated goals as suggested in Goal-based Financial Planning, then you need to consider doing the pursuit –

• If you have a short-term financial goal (3 years or less) and for some reason, you still have an probity allocation, then the recent run-up in the market gives you a good opportunity to typesetting and lock profits and reduce the probity component of your short-term portfolio plane further. Don’t be greedy and try to pericope increasingly returns from stock markets by trying to ride the wave till late.
• If you have a long-term financial goal (7 years or more) then it is possible that the rise in stock markets would increase your probity allocation. A small deviation from chosen typecasting is still fine. But if it has wilt uncomfortably large, then you should rebalance it to bring the portfolio when on track.
• Suppose you have long-term goal where you have decided to have 65% in probity and 35% in debt. But due to markets making new highs, the probity typecasting has increased. If it has increased by a small 5%, then there isn’t much to do. But if it has risen a lot and now your windfall typecasting is 80:20 in Equity:Debt, then this ways that you now have a very variegated portfolio (with 80:20) than what you strategically decided (65:35). You need to rebalance now. So you got to sell a bit of probity and put the redemption proceeds into debt. This may sound stupid in a rising market but it will help reduce the risk in the portfolio by protecting the downside in specimen there is any short-term market correction in the near future.
• Also, when you are doing rebalancing (to reduce probity allocation), it is moreover a good time to weed out the non-performers from your portfolio. Rallies like these requite the rare opportunity to get out of portfolio laggards at good prices. So might as well utilize it to wipe up your portfolio too under the guise of rebalancing.
• And what well-nigh SIPs in probity funds? Should you still continue? The wordplay depends on whether your goal is still a long-term goal or not. If the goal still has several year’s runway left, then you can protract to invest systematically via SIP in probity funds once you have reviewed and rebalanced your portfolio (if need be). So don’t blindly stop your SIP just considering markets have hit a new high.
• One increasingly thing. Please don’t be tempted by rising markets and be greedy and make the grave mistake of using your emergency fund to invest. Never do that! Never invest your emergency fund in equities or stock markets no matter what. Remember, you may not think that there will be any emergency but emergencies don’t wait for you to have an emergency fund. And as Morgan Housel said – Planning is important, but the most important part of every plan is to plan on the plan not going equal to plan. So don’t dare touch your emergency fund to invest in markets!

So those were a few thoughts I had and wanted to share with you as the Indian markets are making new all-time highs in 2023. Remember that often in the long run, the equities will trend upwards via an upward sloping line. So reaching new all-time highs, crossing them and then making newer highs is completely normal. Don’t worry and instead review your portfolio as we discussed above.

Disclaimer – This is just a unstipulated discussion for educational purposes only. The views expressed whilom should not be considered professional investment translating or telecast or otherwise. The readers are requested to take into consideration all the risk factors including their financial condition, suitability to risk-return profile and the likes and take professional investment translating surpassing taking any financial decisions or deportment which may have financial implications now or in future.

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