Wondering why your returns have gone down or even turned negative in the last 3 months? This is what happened in the market in the last 3 months ... and 15 years!
Last trading day (23rd March 2018): Red numbers looking scary 😱
Last 5 trading days are even scarier 💀
Last 1 month: Oh no! Sensex has gone down by ~ 5% in the last one month ...it is very painful to lose one’s hard earned money… what to do? 😰
Last 3 months: Again! Market is down in the last 3 months too. But you see, it went up somewhere in January and at that time everyone was so haaapppy and investing more and more into high risk!!! It’s down about 10% from that peak. 👀
Last 1 year: Finally, you see a green line! Phew!! 😑 Notice the intermittent peaks that were making you happy first and then sad.
Last 5 years: Yo! Green again!! Now you get it. It goes up and it goes down too. Overall, it has gone up. Looks like a roller-coaster ride along with some decent returns! 😊
Last 15 years - one perspective: The market dances a lot, and sometimes upside down too! And it doesn’t seem like there is much of a pattern to it. Just think of it as Shiva’s taandav! 🙈
Last 15 years - another perspective: Sensex which is basket of 30 companies has grown in the last 15 years with an average annualized returns of about 15% with an in-built unavoidable roller coaster ride. 😄
Investing is fun, right!
Btw, by looking at the above graphs if you have come under an illusion that you can predict the next move of the market then good luck with that!
It is extremely difficult, if not impossible, for professionals around the world to predict the market, so you can forget about it when it’s not even your full time job!
So, if you can’t predict which way the market’s gonna go and can’t see losing your money then what do you do?
SIP is a tool which is simple and yet you can use it to your advantage. In this roller coaster ride, SIP will average out the price over time and instill investing discipline in you to achieve your goals.
Now, you must be wondering if I am just another preacher or I am also doing SIP and have ‘skin in the game’ just like you?
Absolutely yes! You can check out my own actual portfolio here:
Wishing if I can summarize it for you? Here you go:
Step 1: Check your Risk Profile here and make sure you are investing as per your risk profile only.
Step 2: Start an SIP and stick to it for full duration of your goal irrespective of how the market behaves.
Step 3: Let a data driven strategy with re-balancing do the work for you.
Step 4 (Most important) : Spend time doing what you love to do and if you can learn a new skill to become better at what you do. Remember, robots are coming!