The Slow, painful correction in Stock Markets which started in October 2021 got magnified by a huge fall of more than 1000 points for 2 days last week. Surprisingly there were very few (negligible) panic calls/messages on WhatsApp university.
4-to 5 years back whenever there was a sharp correction in stock prices, I would be flooded by phone calls / WhatsApp messages/emails from worried investors.
The constant and consistent education about the Power of Long-Term Investment and that Volatility is a part and parcel of all asset classes and inevitably every investor has to face is now ingrained in the DNA of almost all my investors
Well, almost, but not all investors.
Some new millennial investors who started only post Covid fall and have never seen a Correction in True Sense were in for a rude shock.
Obviously, the Hand-Holding and education will take time for them to ignore these falls but I know it’s a natural reaction and very reasonable.
Earlier the obvious question which almost all investors would ask and now only the very new investors ask is
STOCK MARKETS ARE FALLING EVERY DAY, WHAT TO DO NOW SIR?
“If we are facing in the right direction, all we have to do is keep on walking,” goes a Buddhist proverb.
So, when the Direction is right....in this case...our Direction is Wealth Creation and our vehicle is also right...that is the Equity Mutual Funds...then there is absolutely no need to keep looking at the NAV on a daily or even a weekly basis.
Sometimes it makes great sense to be like an Ostrich and ignore the noise all around.
I as a concerned MFD will be like a swan weeding out bad and choosing the best ones suitable as per profile, horizon, and asset allocation.
You, as a good investor, behave like an Ostrich and ignore all the noise around.
CORRECTION IS NATURAL EVEN IN BULL MARKETS
The Sensex had a BIG RALLY from 3000 levels to 21000 levels between 2003-2007. However, the rise was not at all linear.
The Sensex fell more than 10% 13 times in this period and out of which 1 time it was a 23% fall and another time it was a 29% fall.
Just imagine if you had WITHDRAWN your money from the Markets when these falls happened.
You would have missed the 700% RISE for panicking after a 10% fall!
These falls of 10% - 15% are an opportunity to invest extra savings you may have, rather than getting panicky. And, as an Accumulator of mutual funds, you should actually be HAPPY if the NAV is coming down.
BUT WHAT IF THIS BECOMES A REPEAT OF 2008 FALL?
A very valid question and quite understandable.
I strongly suggest you read my article on https://srikavimoney.blogspot.com/2021/09/sensex-nifty-will-never-crash-like.html