The turbulence of March would have shaken even the strongest conviction. Clearly, these were the hardest times an investor faced in a long while. But the constant challenge every investor faces is to calmly weather such turbulence even while taking definitive, precise investment actions.
What an investor did in March will have a strong bearing on his investment performance for a long time to come. If an investor found the courage to invest aggressively in the middle of all the mayhem, his investment performance would be far better than someone else who was busy doing tax harvesting and hoping to buy back the sold shares cheaper in April. Clearly, an investor’s priorities during a grave crisis must be clearly placed.
During every sharp market fall, there will always be two sets of investors. The jury will clearly be divided on the market and on what needs to be done. One set of investors will be actively scouting to invest in the best places. They will be looking to invest when all round selling was going on. Such investors manage to buy right in every crisis.
The other set will be busy measuring recent performance, reacting negatively and not investing at all. They will be following every adverse news, tracking negative views and expecting things to get worse. But, they mostly end up doing nothing till things get a lot better. Such investors never buy right in any crisis.
Which set you belong to will decide how you compound money. The good news is that volatility is here to stay for a while, and we will see more opportunities coming our way.
