Rolf Dobelli, a Swiss author and businessman aptly said, “News is to the mind; what sugar is to the body.” This so nicely applies to investing. Most of us decide our investing decisions based on random news items and these decisions are mostly emotional.
The first market fall always looks tempted to buy more as we most often than not relate it with some news. However, it is the second or third or even the fourth fall when most say ‘BYE BYE’ instead of ‘BUY BUY’.
Peter Lynch was absolutely right when he said that to become successful investor it’s ok to have average brain but one must have good stomach. The stomach to digest volatility, stay rational and stay invested.
Though it sounds very basic, first you’ve to believe making it big from equities is possible. Belief leads to process, behaviour & outcome. Those who try and make it says it is possible. Those who never try and lack conviction says it is impossible. Conviction is the key.
Would you stay invested if you get negative or zero returns for next 3 years? Be aware that such phases would continue to keep happening. Never underestimate the importance of savings. Money is the raw material to make more money.
In mutual funds don’t look for yearly performance. Look for what happens over years. We tend to focus only on high rate of return. But time can deliver big wealth even at moderate rate of return. So, focus more on time than rate.
Today is RBI monetary policy.
Happy Investing !