What are your methods to determine the right entry price for a long term investment ?
@Karthik Sir, any thoughts on this?
buying on Fibonacci retracement on monthly charts.
@Karthik Can help with this query ?
By long term, I hope you mean something like 5+ years. If yes, then your decision to buy should be entirely based on business fundamentals and valuations. The most popular way to determine the right entry price -
- Make sure you fully understand the business
- Validate your understanding with both quantitative and qualitative framework
- Identify the fair value of the business by running a valuation model such as a DCF or Relative valuation
- Buffer for margin of safety and identify the price at which you want to buy the stock
As you can imagine, this is a tedious process but is totally worth it considering the fact that you are investing your hard-earned money in the stock for a long time.
This module on Fundamental Analysis will help you through this process.
Thank You @Karthik