Hold onto your conviction.

A week is a long time in the stock market. Markets have the uncanny ability to constantly change character and this could be very difficult for investors to handle. The rapid change of emotions that an investor encounters if he constantly watches the markets could really weaken his faith in investing. The week that went by was one such phase. To completely ignore the immediate panic, all-round nervousness and pervasive fear, an investor needs ample mental preparation. If an investor is ill-prepared for such wild mood swings of the market, he would in all likelihood abstain from markets during such phases. While, that is certainly not a bad thing for a highly risk averse person, most investors do have or aspire for a reasonable risk appetite. If one has a reasonable risk appetite, then he must learn to be prepared for the market’s irrational behaviour. A prepared investor is usually better placed to respond sensibly to Mr. Market’s extreme behaviour. He would buy on days when there is too much fear in the markets. If you did not invest much during the early part of last week, it is an indicator that your preparation needs to be much better.

The last week’s swings are not the last of such market action. We will have several more in the coming months as global markets and developed nations grapple with slow growth, deflation risks and poor sentiment. China, a nation that stood as an island of growth for years, seems set to compound the world’s growth worries. A disciplined mind is not created overnight. It takes long phases of mental preparation, counselling and patience. An investor who aspires to use his risk appetite sensibly over the next three years should develop the right attributes, seek the right counsel and show the right temperament. Investors who have no time to evolve their own investing skills must identify advisors who will bring such skill sets into constant play. In times like these, investing should be meticulous, mature and mindful. The era of casual buying/selling of shares and usage of phrases like “I play in markets” is over. Wiser investors will realise it sooner than later.

The lack of adequate will and ample conviction at the right time is the cause of all failed investing.

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