Every person who invests in stock markets or Mutual Funds does so for the long term i.e 3 or 5 years at-least ( unless they are speculating). So when one is investing in the Long term, what should one be concerned about? We should be concerned about the quality of the stock or Mutual Fund, past performance and the likely future prospects, right ?
On the contrary however, most investors are caught with this obsession of timing the market. i.e. if they are buying their stocks or mutual funds at a low so that they can optimise their gain when they exit after their investment tenure.
Performance of Mutual Funds esp is a correlation of the economics of the land.. if Indian GDP in the future grows at say 7.50 % + a nominal inflation of 5 % i.e. it is safe to say your Mutual funds which are stock market oriented should be in similar correlation and therefore generate an annual return of 12.50 % to 15% per annum.
Imagine a Man and a Dog walking from their home to the park. At sometimes the dog would be ahead of the man and other times the man would be pulling the dog. However, when they reach the park both will reach together.
Thus whether the Equity markets appear slightly expensive or cheap.. as long as the long term economic trend in India is growing at Best in the World standards.. we should know that our investments irrespective of timing will do exceptionally well given that they are kept invested for a the long term.
So QUIT timing the market and spend more Time in the market.