The investor would be spending a quiet, long weekend away from the Indian markets. It is a good time to ponder about his February fears and to assess if they were overdone. Did they let him buy when there was fear all around? If they didn’t let him buy equity, then it is a good time to understand himself better. After all, he is a part of the herd and is unable to disengage from its thinking. The challenge before Indian investors is only compounded by the volatility of global fund flows and the challenges of other economies. When we are not worrying about our own economy, we start worrying about the world. When we are not worrying about both, our TV anchors will find something to scare us out of buying. In this atmosphere of fear mongering, investors must learn to cut out the noise and focus on valuations. If valuations were in sharper focus, it would help investor take objective and balanced investment decisions. The need for contrarian thinking is acute. Be it the herd buying of Infra funds in 2008 or the mass hysteria in small, mid & micro-caps in 2015, investors don’t seem to have learnt their lessons. Buying just one sector or category of equities is always going to be too risky. The current phase is a good time to adopt a more balanced approach to equity investing. Introspect and reinvent equity investment strategies now if you want to play the Great Indian economic recovery. If you still doubt it is going to happen, then equity is not for you. If you are a firm believer, the markets belong to you.
“The challenge in life is knowing what’s next.”- Walter Schloss.
