n NISM Certifications
NSM General NISM
Medium

A client wants to wait for a market correction before investing. What is the key message to communicate?

Practice question from C3 - Test Your Knowledge — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Market timing is possible with the right research tools

  2. B

    They should wait until they feel completely comfortable

  3. Predicting market corrections is impossible even for experts, and starting now via SIP is recommended

    Correct answer

  4. D

    Only invest when the market has already corrected by 20%

Why this is the answer

Market timing is extremely difficult and unreliable. The Indian stock market has grown approximately 180 times since 1995 despite various crises, demonstrating that staying invested through a systematic approach like SIP is more effective than trying to time the perfect entry point.

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