FIIs pull out money from various performing markets in rotation. They pump in money, resulting in the indices going up. When the local retail investors get euphoric, they book profits and transfer it to another market which has at that point in time been lying low, and the cycles continue.
Secondly, whenever interest rates go up in the US, they pull out money from various Equity markets and pick up US Treasury Bonds. These are held till the rates start going down. When the Fed starts reducing interest rates, the yields of these bonds start increasing in inverse proportion to the reduction of interest rates, multiplied by their modified duration ( which could be many years). There have been a few exceptional occasions in the bond market history, when some of the bond yields rose to as high as 40%. That's when they'll book profits and flood the Equity market.
So we need to keep accumulating in good stocks and Mutual Funds for the present. When the inflation rates come under control and the excess liquidity in the US markets has been mopped up, the Fed will start bringing the interest rates down. That's when our markets will actually get into the bull run.
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There may of course be a case where the markets may discount certain expected moves even before the Fed acts, which may initiate a bull run a few months before time. Alternatively, there could be certain number of false starts to the bull run, to lure retail investors and book ltd profits. These false starts will also make it difficult for people to time the market, and those who keep waiting for the correct timing, may still be waiting by the time the bull run is already well underway. So we need not overly tax our brains. We need to just remain patient and keep accumulating. Let the bull run come when it comes. Sooner or later it'll come and we'll reap the benefits only if we are already invested at that time.
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