INVESTMENT PSYCHOLOGY

Kuntal Chaudhuri – CFP

PH- 9433240927

Success based on emotional response to market conditions is the result of chance, and chance does not help us attain consistent results. If you & me know when to gets in & gets out of the market – Gurus like WARREN BUFFET & RAKESH JHUNJHUNWALA should also know that but they are holding their assets for a very long period of time and that is the key difference.

Investors should have the mind set for long-term. For all types of investors, seasoned  &  new  , long-term investing is the easiest to follow and has proved rewarding. To follow this one requires sound & clear  long-term goals. This, then, has to be backed by a clear path (the means) to achieve that goal by regularly investing sums in assets.

Wealth is created by holding assets for 10, 20 and even more 30 years  but in between performance of asset class rotates and we should adjust with it. Most amazing fact is that to rebalance the asset class and  / or  to take new entry people generally sell  the safest bet  and buy the risky bet ; for example, when gold is at the end of bull market they buy gold; in the last leg of the Pharma bull run they buy pharma and so on !!!

Long-term investors don’t bother bull or bear market – they only focus on their goals. To fulfill their goals they invest regularly and accumulate the asset. They have a full control on their behavioral aspect.  They treat volatility as their friend not the enemy.

I have seen many investors missing out on great opportunities because downturns have unnerved them. Instead of accumulating more for the ultra-long haul, they focus on short-term market movements & miss the big picture. If anyone can avoid the temptation to jump out of the market but just continuously jump in all the time , as a long-term investor he could do far better than the short-term one.

India’s younger demography &  it’s growth market are expected to see many companies post good growth rates over time. Long-term participation in financial assets will provide investors to enjoy the benefit of it. As economies & companies grow investors will get the reward of it. Only long- term investors can benefit the most out of this growth.