Ride Over Volatile Markets By Staying Invested

Financial Planning

- Dr. Jyotsna Joshi

Yogi Berra once said, “When you come to the fork in the road, take it!” With elections around the corner the investors are faced with a conundrum: should they stay invested or quit?

Whenever the markets fluctuate, most investors turn risk-averse. If markets fall, they tend to get caught up in the whirlwind of emotions and anticipating a further fall, start panic selling. By doing so, they tend to lose as they start selling at a lower price in search for other safer avenues which garner lower returns.

Because most people are affected emotionally, the investors forget that bull markets follow bear markets and bear markets will be followed by a bull market. The market movement is inevitable-it will always go up and down. Being emotionally driven, investors forget that in the short-term market may be driven by sentiments, but in long-term it is driven by fundamentals only.

About equity investing, we presume that volatility is the worst thing for investors. In the past few months, the markets have been volatile. In addition to that, we are also undergoing the general assembly elections, which further raises uncertainty.