Last Updated on December 29, 2021 at 11:56 am
When you start an exercise regimen, the day after you would fee soreness and pain in new areas! I guess muscles that were never flexed before behave like that when flexed for the first time. Most investors who have started investing in equity mutual funds since 2014, 2016 would never have seen a prolonged period of negative returns. When they see their losses evaporate day by day, a new sense of loss, fear, regret and panic sets in. Unless you bear the pain and invest in equity through this period of loss, you can never change your lifestyle.
Professional fitness trainers would advise you to work through that new pain and make your body get used to it. That is exactly what you need to with equity. You have to bear the prolonged period of loss and keep investing. Many ask how did I bear the loss for the first five years of my Ten Years of Mutual Fund Investing: My Journey and lessons learned. See the article for details about this image that shows the gain or loss in my portfolio (June 2018) Nifty Next 50 so good then. 
I say then because, in Dec 2018, this is the situation. See: My personal financial audit 2018 It would probably be worse now (for NIfty Next 50)!
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I have nothing against the said index, merely point out people who looked at past returns only and invested in without understanding risk are suffering, as they should. So how did I bear the loss? Quite simply by not looking!
Well, I did know that my portfolio was in red as I logged in to the brand new HDFC Fund portal but I did not know the annualized return or graphed the folio as above. In 2014 when the daily gain from the portfolio was more than my monthly investment I realised something was happening!
The point I am trying to make is, this is the nature of equity. It will torture you for months to years and reward you in a few weeks and then the torture will start all over again. When losses begin, gains made over the last few years can disappear in the course of weeks.
Hence the need for portfolio management, risk management, goal-based target corpus management etc. However, none of these involves stopping investments based on news and opinions. Leaving aside tactical investing which requires a lot more maturity and a lot more discipline, systematic investing is investing with a system and not invest each month!
If you need money within the next five years or maybe even 10 years, pull out, invest somewhere safe and be done with it. If you are only in your 20s or 30s with needs 20,25,30 years away, you have to keep investing through this period like a machine otherwise you are destined to a middle-class Indian all your life. I apologize if that is offensive, but it is the sad reality of life.
By all means manage risk in your portfolio, but first, recognise that the first and foremost risk is you. Yes, you, your emotions and temperament. If you can keep that in check and stick to the plan (assuming you have, else stop reading useless recession articles and work on that!), you give yourself a chance to get rich.
If you want a 100% guaranteed that you will be rich, then you are the in the wrong place, my point is, not only should you have a plan, you must back it with some optimism and enthusiasm and inertia.
Without these qualities, I the son of two middle-class government servants could never have changed my “social staus” a couple of notches up over the last 10-11 years. That is what I spoke about in yesterdays video
Also, see:
And,
Do you have a plan? If not start with our free e-books, put your life in order and then start a hobby not related to money.
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Now watch Let's Get Rich With Pattu தமிழில் (in Tamil)!About The Author
Dr M Pattabiraman giving a lecture
Dr M. Pattabiraman (PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over 14 years of experience publishing news analysis, research and financial product development. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free, AUM-independent investment advice. Connect with him via Twitter(X) LinkedIn YouTube Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (Published by CNBC TV18) for DIY investors. 
This book helps you ask the right questions and find the right answers. It also includes nine online calculators to create custom solutions.
(2) Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want. 
Both the boy and girl versions of "Chinchu Gets a Superpower".
Most investor problems stem from a lack of poor decision-making. We made bad decisions and money mistakes when we started earning, and we spent years undoing them. Why should our children go through the same pain? What is this book about? As parents, what if we had to groom one ability in our children that matters not only for money management and investing but for every aspect of life? My answer: Sound decision-making. So, in this book, we meet Chinchu, who is about to turn 10. The story follows what he wants for his birthday and how his parents plan it, while also teaching him key ideas about decision-making and money management. What readers say! 
Feedback from a young reader after reading Chinchu Gets a Superpower!
Must-read book even for adults! This is something that every parent should teach their kids right from a young age. The importance of money management and decision-making based on their wants and needs. Very nicely written in simple terms. - Arun.
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