Bear the pain and invest in equity through loss or you will never change your lifestyle!

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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. Mutual fund success story: gain or loss in the portfolio

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)!

Retirement equity portfolio vs Nifty Next 50

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:


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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About the Author M Pattabiraman author of freefincal.comM. Pattabiraman(PhD) is the author and owner of  He is an associate professor at the Indian Institute of Technology, Madras since Aug 2006. Pattu” as he is popularly known, has co-authored two print-books, You can be rich too with goal based investing (CNBC TV18) and Gamechanger and seven other free e-books on various topics of money management.  He is a patron and co-founder of “Fee-only India” an organisation to promote unbiased, commission-free investment advice. Pattu publishes unbiased, promotion-free research, analysis and holistic money management advice. Freefincal serves more than one million readers a year (2.5 million page views) with numbers based analysis on topical issues and has more than a 100 free calculators on different aspects of insurance and investment analysis. He conducts free money management sessions for corporates  and associations(see details below). Previous engagements include World Bank, RBI, BHEL, Asian Paints, TamilNadu Investors Association etc. Contact information: freefincal {at} Gmail {dot} com (sponsored posts or paid collaborations will not be entertained)
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