You must have heard about market indexes like Nifty 50 or Sensex. These indicates the market movement and capital appreciation from a particular time.
Most of the time rising indexes creates FOMO* in the investors mindset and they start investing in a hurry and just with a small movement in market they get trap in situations neither they can exit from their positions nor they left with enough money for further investment.
Now the question is, What is the good time to invest?
You must have heard of famous quote from Warren Buffett for investment timing.
“Be fearful when others are greedy & greedy when others are fearful”
~ Warren Buffett
So how would an investor know, whether people are being fearful or greedy right now?
Solution to this complex question is very simple i.e. MMI i.e. Market Mood Indicator. MMI is a sentiment tool that describes the current mood in the market as emotions.
So whenever MMI is in Extreme Fear Zone, one can start fresh open positions.
- *FOMO- Fear of missing out.
- Flirting with Stocks: Stock Market Investing for Beginners by Anil Lamba