{"id":2438,"date":"2024-01-01T10:40:36","date_gmt":"2024-01-01T05:10:36","guid":{"rendered":"https:\/\/sibha.in\/RR\/?p=2438"},"modified":"2024-01-01T10:40:36","modified_gmt":"2024-01-01T05:10:36","slug":"forgotten-investments-perform-well","status":"publish","type":"post","link":"https:\/\/sibha.in\/RR\/2024\/01\/01\/forgotten-investments-perform-well\/","title":{"rendered":"Forgotten Investments Perform Well !"},"content":{"rendered":"

\"\"<\/p>\n

As I sat watching\u00a0 the last sunset of 2023, musing over the year it was,\u00a0 it occurred to me that the year has been a phenomenal one for stock market watchers.<\/p>\n

While the individual stories may differ, there would be a general consensus that the year has given above average returns to hard core professionals and absolute novices , alike .<\/p>\n

So , is the stock market turning attractive to the public ? Is everyone trying to get into stocks and mutual funds ?<\/p>\n

Curiosity kindled , I turned to Google for some quick figures.<\/p>\n

As expected, the MF inflows have increased by 125 %.<\/strong><\/em><\/span><\/p>\n

\"\"<\/p>\n

The number of demat accounts increased by 27%.<\/span><\/strong><\/em><\/p>\n

\n

So is it going to be many happy ‘returns’ year after year? Are all the new investors going to be blessed by 15-20% annualised returns for rest of their lives?<\/p>\n<\/blockquote>\n

The investment world seems to be a happy place and yet we keep seeing threatening, mandatory information wherever you try to enter .<\/p>\n

\"\"<\/p>\n

Anecdotes abound in many a family about uncles (never aunts) who went bankrupt due to Dalal Street.<\/p>\n

There are many who believe, not without reason , that stock markets are gambling dens .<\/p>\n

So, what’s the truth ?<\/p>\n

Who makes money and who bites the dust?<\/p>\n

I am sure many would have come across the book ” Psychology of Money ‘ by Morgan Housel.<\/p>\n

The author states emphatically that it’s all in the mind .<\/strong><\/em><\/p>\n

\"\"<\/p>\n

That’s the theory and today I saw it in the real world.<\/p>\n

A friend of mine has a mutual fund portfolio created for him by somebody who is now not available to monitor the same.<\/p>\n

The friend never bothered to check how his investments were faring.<\/p>\n

 <\/p>\n

I , a confirmed technology addict cannot refrain from checking through various apps and websites on how my modest portfolio was faring . At times it happens thrice a day and gets too boring despite the high that Dalal Street gives.<\/p>\n

Looking for something to do, I casually enquired the friend about his portfolio and as expected I got an indifferent reply.<\/p>\n

With some effort and the magic of internet I could compute his returns in minutes.<\/p>\n

\n

It was a ‘Wow’ moment as the last nine months had given him a whopping 50 % returns and he was not even aware of it. In simple terms, at this rate, his money was getting doubled in a year and a half.<\/p>\n<\/blockquote>\n

That’s the kind of returns any mutual fund manager would be proud of any day.<\/p>\n

What did he do right? He just left it alone by design or default.<\/p>\n

What happens when you don’t leave it alone?<\/p>\n

A human mind is hardwired to lose money in stock markets, sometimes at an astonishing pace.<\/p>\n

When the stock \/ MF moves up a 10% the fear of losing that 10% says ‘ sell , sell !’<\/p>\n

When it moves another 10% , (after you have sold) the fear of missing out and the greed for more says ‘buy buy !’.<\/p>\n

So, one keeps buying high and selling low. In a bull market , this only minimises the profits while in a bear market , this phenomenon can wipe out your capital.<\/p>\n

\"\"<\/p>\n

Smart people use\u00a0 technology to quantify everything ,including emotions !<\/p>\n

The market mood index is supposed to show the dominating emotions. Theory says , that a smart investor should buy when the public is in panic and should sell when the public shows avarice.<\/p>\n

Will it work ? Unfortunately No.<\/p>\n

As on date (01 Jan 2024) , Tech pundits say it’s\u00a0 Greed<\/strong><\/em> that is dominating. Suppose this image goes viral among investors and the multitudes start selling , the indicator itself will be affected showing ‘fear’. That would mean ‘start buying’.<\/p>\n

So in the age of technology and social media any action based on these indicators will influence the indicator itself !<\/p>\n

So, what’s the way out to beat the street , in case you want to be fully invested in the stock markets directly or indirectly?<\/p>\n

There are two options :-<\/p>\n

\n

The difficult way is to be Buddha like or as a karmayogi would say\u00a0 ‘ be like the water on Lotus leaf; be there but totally detached ‘. See the ups and downs and the wild swings but don’t give in to greed or fear. It’s easier said than done.<\/p>\n

A more human way would be to just invest and forget about it ; and probably that’s what my friend did right .<\/span><\/strong><\/p>\n<\/blockquote>\n

It would be fun to see how the new investors behave in a bad year.<\/p>\n","protected":false},"excerpt":{"rendered":"

As I sat watching\u00a0 the last sunset of 2023, musing over the year it was,\u00a0 it occurred to me that the year has been a phenomenal one for stock market watchers. While the individual stories may differ, there would be a general consensus that the year has given above average returns to hard core professionals … Continue reading “Forgotten Investments Perform Well !”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_editorskit_title_hidden":false,"_editorskit_reading_time":0,"_editorskit_is_block_options_detached":false,"_editorskit_block_options_position":"{}","footnotes":""},"categories":[67],"tags":[],"class_list":["post-2438","post","type-post","status-publish","format-standard","hentry","category-misc"],"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/posts\/2438","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/comments?post=2438"}],"version-history":[{"count":4,"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/posts\/2438\/revisions"}],"predecessor-version":[{"id":2448,"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/posts\/2438\/revisions\/2448"}],"wp:attachment":[{"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/media?parent=2438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/categories?post=2438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sibha.in\/RR\/wp-json\/wp\/v2\/tags?post=2438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}