Entry price for Long term Investment

What are your methods to determine the right entry price for a long term investment ?

@Karthik Sir, any thoughts on this?

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buying on Fibonacci retracement on monthly charts.

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@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 -

  1. Make sure you fully understand the business
  2. Validate your understanding with both quantitative and qualitative framework
  3. Identify the fair value of the business by running a valuation model such as a DCF or Relative valuation
  4. 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.

Good luck!


Thank You @Karthik