Stock markets are at all time highs and scaling new peaks by the day. If you are still not invested, you feel you're losing an opportunity of a life-time. If you are already in and have made good gains over the past one year or so, you are afraid of market volatility and losing your gains in case markets move down. Does it not remind you of 2006 when you faced a similar dilemma?

Retail investors face similar dilemmas in every bull market. The only mantra to tackle this dilemma is to strike the right balance between your greed and fear. However, doing that needs some discipline and some personal effort.

Know why markets are up:

Equity markets go up in anticipation of favourable business environment. Analyse why the market is up this time. If it is due to sustainable, structural changes which would facilitate conduct of business, there is no need to fear the short-term volatilities since such gyrations are characteristics of all equity markets. Look at market price-to-earnings (PE) ratios, government policy stances, interest rate movements, etc and you will get a good idea about sustainability of the current market direction.

Cut out the market noises from your decision making:

Avoid those information a sources which give you hot i tips and fail to follow them t up. A large number of advisers are usually clueless about o the market and the gains they g boast of are results of good s luck rather than informed investing. Read blogs and articles of market experts a known for their unbiased analysis. Consult financial planners who are well qualified and aim for long-term growth of your money rather than quick gains.

Know why you are investing:

Investing for the sake of short-term gains or simply for getting good returns will never lead to sustainable wealth creation. Goal-based investing is the only way you will be able to avoid falling prey to greed and fear when markets are exuberant. Set your goals, invest in right products, monitor them well if it is an active product and have faith in your selection.

Know products best suited to your goals:

People usually have certain favourite investment avenues and they tend not to look beyond them. Those products could be the ones which have given them good returns in the past, someone may have recommended those or it could simple be that they know only about them. None of these is a good enough reason to home on to a small selection, excluding the others which are available. Avoid such pitfalls. Look for products best suited to your goals and risk profile, and if you feel, seek professional help.

Zero in on your financial goals:

Such Goals usually relate to children (education and marriage), buying a property, regular vacations, big ticket purchases like car, and other miscellaneous goals like charity.

Calculate costs of your goals:

Inflation pushes up cost of everything. If graduation now costs Rs 10 lakh, it will cost approximately Rs 26 lakh after 10 years if education cost inflation is 10% per year.

Select the right product for each goal:

Rule of thumb is that you invest in equities for long-term goals (more than 3-5 years hence) and debt products for shorter term goals. However, your own risk profile is an important parameter to consider. Do not take risks you are not comfortable with, but also do not fall prey to hearsay and investing myths. Unless you can analyse direct equities well, choose good equity mutual funds from various fund categories. For fixed income products, inflation and tax adjusted returns are important. Debt mutual funds usually score higher than others, especially in current scenario of falling interest rates.

Review your portfolio regularly:

Depending on market conditions, be invested in the right product. For example, equity markets are expected to do well for the next at least 2-3 years and your long-term goals can benefit from equity investing. But coincidentally , with falling interest rates, even long term debt funds are in for good returns in the next 2-3 years. Review your portfolio as per your comfort level of risk and go ahead.

Lastly, investing is more of common sense and levelheadedness. If you can keep your head when others are losing theirs, you are in for a jolly ride.