Everyday this index is going from positive to negative, negative to positive with no definite direction.
Most investors too follow this policy and some how mimic this behavior of the market. In 2000-2001 period when the so called markets crashed, suddenly people found solace in fixed return instruments like Fixed Deposits of Banks, Post office and were very happy to be getting 8%-9% range of interest.
Come 2005-2006 till the early part of this year when the markets continuously boomed and gave returns of 58%-108%, people suddenly removed there FD’s and stayed invested in the markets.
Once again the markets are giving returns of -2.5% to 16%. Allmost all banks are visibly trying to beat each other showing the 9% through 9.5% banners – which entice the investors to get back to their roots.
This obviously is NOT the recommended way.
An ideal investor would allways plan his investments with a right mix of Fixed return instruments and stocks / derivatives.
The idea is if one is doing good, the other normally would do bad. So at end of day at all times you need to win on some point right?
So go and do that rebalancing of your portfolio and avoid the media hypes and stay invested at all times!! Historically this mix should produce the 12% through 18% average which is much higher than inflation and is the primary objective of investments.