As one who has invested in mutual funds for over 20 years and witnessed not a few bull and bear runs along the way, some thoughts come to mind.
Listen to the various market experts on business channels these days. Talk to experienced investors. Or for that matter, talk to the not-so-experienced ones – a once in a century event like Covid-19, one would imagine, pretty much takes experience out of the equation. Or, does it?
Even if we do not have the experience, there is history to turn to. We have enough and more data from past market crashes and events subsequent thereto, that investors who stay put not only recover their losses, but gain much more.
And for those gutsy enough to invest afresh, they make even better returns since they enter the market close to the multi-year lows.
However, while ‘buy cheap and sell high’ seems obvious, numbers show that investors flock to equity when indices like Nifty rise, and move out when Nifty falls.
In other words, many investors will buy high and sell cheap – and both these events happen when the Nifty or the Sensex start making headlines, leading to a herd mentality.
Investors need to remember that the market moves in cycles – the market will go up and down and up again. (Where else will it go? Where else can it go?)
So buying when the market is on a high may well ensure a low for your investments, before it starts climbing again. And if you enter when the market is at a low, the upside is probably nearer than what most investors would imagine.
C’mon, go against the tide and invest today. You will benefit in the medium and long term.
