Investors Investment Behavior are riskier than the Markets


Indian Equity markets have witnessed a roll coaster ride in FY 2018. Nifty is down by 5.37% (till date for FY 2018); Nifty started positively with a gain of +4.72% for the month of Jan 2018, since then the index is down more than 9% over last two months on the back of TDP exit, banking scams, fed rate rise and increased global trade fears.

• Are you a long term investor?

Equity Investments are suitable for long term investor. Assume you are investing for retirement; kids educational needs which might have an investment horizon of 5-20 years. Should you be really concerned about short term fall. The below chart depicts nifty performance over short and longer time frame. 



   

Investor behavior tends to change based on the market movement. Investor are comfortable holding on to long term perspective when markets are trending up; however, as markets trend downwards, panic sets in. Please note if your retirement is 15 years away, its still 15 years away, it does not change based on market going up or down in next 1 -2 months.

• Do You Invest regularly?

When markets are trending up, there is lot of market exuberance and individuals become expert in picking stocks and funds. However, as markets trend down all the exuberance vain out. Systematic investment plan is a great tool to buy in the markets on a regular basis; don’t allow your emotions/behavior to affect your accumulation process. Investment success heavily depends on Investment discipline

• Do You buy more when markets are down?

Markets move up & down; remember the quote “ A smooth sea never made a good sailor”. Rational investor is one who buys more when markets are down. You will gain when you buy low and accumulate more when markets are trending down

• Do You have expertise in managing your investment?

Investment management requires expertise; Majority of the Individuals tend to base their investment decision based on tips they receive from a friend, media channels, financial newspapers. Please note a good fund does not necessarily be good for you. In a bull market individual tend to behave as investment experts. 

Remember the popular quote of Mr Warren Buffet “You never know who’s swimming naked until the tide goes out”. Always consult an investment expert for a better financial future.

Conclusion


Equity investments are great wealth creator. Equities are volatile and needs to be managed. Individual could create a great wealth provided they invest regularly, accumulate more on dips and with long term perspective.

feel free to get in touch on 0965-65708812 for expert Financial Planning & Investment Management

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