Today important question is "Why retail investors should use SIP strategy?": Very Simple: An SIP strategy would make sense on a high quality stock.
Another question: How then can a retail investor attempt to show better price till such time that he figures out how to be sure and persistent with his venture.
One method for being near the market price is by method for making consistent investments. Rather than committing whole capital at one go a investor can adopt the procedure followed in systematic investment plan (SIP) for mutual fund investment. A state of alert should be highlighted here that the quality of stock should be great. An investor can sink chasing an bad stock down.
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Regular investment on the way down will ensure that the average price is near to the market price. Markets have a tendency of staying irrational longer than one can remain solvent. Regular investment takes the feeling out of venture. An investor is left to focus his attention on identifying good companies and then trying to enter at a valuation which he feels is cheap. In case the stock falls he can average his position. Similarly if the stock price moves higher he can continue to chase the stock having the comfort that his weighted average price is always lower.
Thinks about have demonstrated that SIP putting gives higher return in rate terms than a singular amount methodology of investing. The other point of preference for a retail investor is that volatility is much lower in SIP format of investing, which will suit the mind of the retail investor.