Are you a Bazigar Investor?
Well, it’s 10.30 pm and I am travelling back to my home. I am super exhausted and had a
rough day. And guess what, I just received a WhatsApp text from my boss. No, he is not cribbing.
It’s a motivational video which shows when our Big B was bankrupt after his successful carrier,
when our master blaster had a tennis injury after proving his worth and when our prime minister
was a tea seller. The cherry on the cake, Radio Mirchi just advertised the dialogue, “Haar ke jitney
walle ko bazigar kahte hai”. It made me wonder, we do have ups and downs in our life, but there
is always a silver lining in the end. One must never quit.
The same philosophy applies to investment market as well. There are days when your
portfolio is all green; there are days when it’s all red. It’s just like monsoon which is never
predictable, but what follows is the spring, which is always followed by it. Allow me to refresh
your memory, when market fall in 2008, in 2016. But we have always seen it grow bigger and
better after every fall. Though the recent fall is a minor one, we do have a very optimistic view in
the future.
| Amount invested for years | Percentage appreciation | Percentage depreciation |
|---|---|---|
| 1 year | 67% | 32% |
| 3 years | 87% | 13% |
| 5 years | 93% | 7% |
| 7 years | 99% | 1% |
| 10 years | 100% | 0% |
Numbers never lie. Had it been the scenario, if you would have invested your hard earned
money for a span of years mentioned, you could have earned stated appreciation in your money.
You can also see depreciation as well. But wait and watch. The market never disappoints. 10 years
and boom, no depreciation at all. It’s all green.
I am a firm believer of the proverb, “In every adversity, there lies a seed of opportunity”.
The proverb applies to equity market as well. Does it mean, the market downturn is a good sign
for investors? Of course, it is. Consider a scenario, where you have to purchase gold and your
budget is fixed. It has come to your knowledge that price of gold is going to fall in the next month.
A wise man will wait for a month to purchase gold so that he can get more grams of gold unless
his Highness has got no chill. Jokes apart, the same goes around with mutual funds. The price of
each unit of the mutual fund goes down during the market downturn, enabling the investor to
get more number of units, on the same amount invested in prior months. This helps him in
acquiring more units. When the market rises again, he can sell those units at a higher price and
gain profits.
Warren Buffett once said that as an investor it is wise to be “Fearful when others are
greedy and greedy when others are fearful.” As you can see, the second half of the saying is
applicable now. The market is down and there is a wave of panic amongst investors. It’s the right
time to invest and hold on to your existing portfolio to reap the benefits in the future. Leverage
the downfall and witness the benefits of a systematic investment plan. In a nutshell, remain calm and
be patient. Stay invested.
Happy Investing !!