One of the questions that I often get asked is

  • “Should I start investing right now? Or should I wait until the markets are slightly more favourable?”

Or another flavour of the same question,

  • “Adi, I think the markets are really high now. Do you recommend that I wait for the next bust, invest all my money then?”

In fact, my friend posed this exact question to me. I had already tackled this with facts and figures on an earlier post: Start investing : where, what and how?

But apparently facts and figures don’t stick well. So, instead of all the boring numbers, I am going to tell you a simple story. A parable of sorts.

We all love a good story. And for us homo sapiens, stories always seem to stick around rather than numbers. Buckle up, its story time.

Story : A tale of two walks

Chapter 1: The beginning

Meet our protagonists :

  • Alex: The blue jacket man
  • Dobby: An energetic little brown dog
Our protagonists for the story. Dobby (the dog) who is always leashed by Alex (the man).

Dobby can a get little too excited at times and run around everywhere, so he is always leashed. And Alex has control of the leash.

After a relaxing time in the park, and they are both now heading back home.

Alex and Dobby want to get back to home.

Now, it is when things get really interesting. Especially, the route they both take back to home.

Chapter 2: The way back home

Alex, being the sane and wise one, take the direct path to home. He knows the way, and he is deliberate about it, and it is pretty much a straight line back home.

The path of Alex.


On the other hand, our little Dobby is mischievous. He gets distracted by all kinds of stuff.

  • He runs around everywhere and sniffs things.
  • Chases around dogs of opposite gender in hopes of wooing them.
  • Runs around, postures, and (empty) barks at other dogs.

He walks around as if he has no plans. And you really cannot say where he is headed at any given point in time.

But since he is leashed,  fortunately for us, he cannot get far away from Alex. He starts and ends at the same place. But his path is not so straight forward and does not have any rhyme or reason to it.

The path of Dobby.

Chapter 3: All together

So, if we overlap and visualize the routes they took together, then it will look like the following.

Path of Alex and Dobby together.


How does this all relate to Markets and investment strategies? 

Allow me to remove all the imaginary characters and leave only the paths taken behind.

How the story relates to market movements?


Now most of you might come across something similar to the brown line in the last figure in the financial news. The typical market movements look like that.

Chapter 4: Moral of the Story


If you have not already deduced the analogy, then here it is :

StoryReal meaning
AlexThe real intrinsic value of an investment.
DobbyThe value assigned to an investment by the market. This is the price that you pay when you buy an investment.
Path of AlexThe increase in the intrinsic value of an investment over time.
Path of DobbyThe market movements of an investment.
The Leash The difference in the intrinsic value of the investment to what the market values this investment.


Much like our Dobby in our story, the markets zig, and zag. They both are at times irrational and move in weird ways for weird reasons.

If you follow Dobby, you would not be able to figure out where it is actually going and it will drive you crazy. Similar, following market movements is not a very useful exercise.

You really cannot predict it.

Real Value

If you want to know where they are headed, focus on the Man. Unless he has lost sense of what he is doing, he will typically know the way back home. It is a straightforward, deliberate, and incremental step forward. One at a time.

And similarly, unless we have a major disaster (nuclear war, zombie apocalypse, and such improbably events) humans will continue to be creative. They will continue to make deliberate and incremental progress. And this will increase the intrinsic values of the entire economic market.


And, for Defensive investors like you and me, the best way is to believe in this human progress and follow the course.

The course is already explained here. I am repeating it here once more :

  1. Save as much as you can.
  2. Invest automatically every month a fixed amount (and whatever you can spare) in a low cost broadly diversified index funds.
  3. Be diligent about this and do not time the market.

Do not get tempted to buy into that new sexy stock. Do not try to keep tampering the portfolio according to new market movements. Make a solemn commitment, that you would stick it for the long-haul and well then stick with it!

Believe in the Man, and not the Dog!

If you have already not started,

The best time to start investing is right now.

Not later, not earlier.

The worst you do with this strategy is overpay by the price of the leash (the difference in the intrinsic value and market value). But, if your time horizon is long :

  • which it should be otherwise you are speculating not investing!
  • the leash difference will average and nullify itself out.


  • Do not follow or get swayed by market movements.
  • It is pointless and not a helpful exercise. At times, it’s even stressful.
  • Pick a strategy and stick with it.
  • The best time to start investing is right now.


Please SUBSCRIBE if you would like to be notified when such posts come out. Also, if you find this helpful, please share it to your friends and family. I am mainly doing this to encourage people to start considering investing. As of now, there is no monetary angle to this blog. More audience encourages me to keep writing such useful content. Thanks, folks.
Until the next time, Ciao!

If you like this,

you might also enjoy these other series of related posts.

Disclaimer: Like any good parable, this story is of not my invention. I actually read this years ago in one of the investment books. I don’t remember which book but this story has always stuck with me. Obviously, it doesn’t entirely capture the nature of the market. But I find this analogy immensely helpful in those tempting times. I hope you do too.

Investing in stocks : To wait or not to wait
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4 thoughts on “Investing in stocks : To wait or not to wait

  • May 24, 2020 at 13:18

    Adithyan, again a beautiful post! During the pandemic I was scrambling to find stocks to buy but your post is timely and a eye opener, one can just buy index funds (though I didn’t buy, nevermind it never late). I would like to add one point for people like me who buy stocks and experienced unprecedented situation, index funds are quite safe even during recession or they give opportunity to exit market safely as there are circuit breakers in place in all major exchanges of world!!!

    • May 24, 2020 at 13:54

      Thanks Santosh! Yup, Index Fund for the win.
      For regular defensive investors like us this is the best option.

  • May 25, 2020 at 10:25

    Wonderful illustration, Aadi!

    • May 25, 2020 at 12:57

      Thanks Vinay!


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