This is the second part of the two-part series. Part 1:
What do you do when you have to cut yourself off from the world, especially at a time when Sensex is down say 1000 points? Switch off the terminal?
Whenever such steep volatility hits the market, the best way is to detach from the market for some time instead of following the trend.
Such extreme movements can create a lot of anxiety and stress and can lead to impulsive and irrational decisions.
Mind Over Money: Fear of losing greater than happiness of gaining, says Piyush Nagda
“Whenever volatility hits the market, the best way is to detach from the market for some time instead of following the trend,” says Piyush Nagda, Director – Private Wealth & Product Strategy at Monarch Networth Capital Limited.
90% of traders are afraid of losing money that they stopped trading. Do you remember any instance from your past when investors / traders must have come back to you?
Fear of losing is greater than the happiness of gaining. Everyone wants to buy at low and sell at high, but it seldom happens.
When markets are in downtrend people avoid investing when things are available at reasonable levels.
We even see investors stopping SIPs when markets fall. These decisions are often driven by herd mentality and fear.
How can one overcome the noise in the market? It could be data, speculative news, or just heard on some Telegram channel?
24X7 flow of news, data, and market noise compounds the problem by prompting investors to constantly act or react due to Fear of Missing Out (FOMO), severely impacting investment decisions and resulting outcomes.
Taking the services of professional asset managers and / or financial advisor can help in minimizing these distortions and maximizing returns for long-term wealth creation.
Systematic Investment Plans (SIP) is one of the best ways of disciplined investing for the long term with peace of mind.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)