Contrarian Conviction Will Rule

Contrarian Conviction Will Rule

When you start an investment, journey counts. Given that most people aggressively start investing around market peaks, their starting point is not ideal. Most investors tend to scale up their equity investing around market peaks.

While this has become a way of life, the subsequent behavioral responses matter for their long-term outcomes. When one starts at the wrong time, two or three years after that, things will almost always look like crisis hour. One tends to question everything and the tendency to become extremely judgemental rises exponentially. These investors even start to think that is responsible for this situation. But, it is important to remember that just when one is angry, cynical and judgemental, a small group of investors may be working on the other side seeking opportunity in crisis.

It is these investors whom you always seek to follow in every bull market. What every investor must learn now is to renew trust in the asset class, in the economy, and in good advice. Showing patience in tough times will always be richly rewarded. The markets will test the resolve of the best of investors. The worst of times to invest is when past performance starts looking too rosy. Most investors have shown more interest in equity during those times.

The best of times is when there is little to cheer. In that sense, the upcoming economic recovery could well be history’s best phase for Indian investing. Showing the same resolve in bear markets will lead to significant wealth creation in subsequent bull runs.