Equity Markets

As an amateur student I thought the higher I climb the better the view.

But studying Finance taught me that just like all other things in life, the view on the market has two different takers. As investors we tend to fear when the market rises because the further it rises, the fear of falling harder increases. Hence we adjust our positions to avoid such a hard fall.

(Although the view is better, one wrong step and the fall is harder.)

But then again we have the speculators who enjoy and feel safe at such great heights of the market. There are two kinds of investors from what I have understood. There are those who are planned and then there as those who are unplanned about their investment goals.

Investing in the share market is like driving a car my father once said. To master the roads, you would have to practice everyday. Then again you can only drive safely if you knew how to manage looking at the road ahead of you and at the rear view mirror.

Investing looking at the past performance or the history of the stock is like looking at the rear view mirror throughout the journey, you are bound to meet with a fatal accident. You base your expectations on the past and they are poor predictors of the future prices (as taught in corporate finance):)

The unusual behaviour of speculators:
- investors buy when the prices are low, but speculators buy when the prices are high.

Indirectly they are comfortable with high prices.

The restless behaviour of investors tends to prolong when the investments are not aligned and hence they speculate buying or selling at every turn of the market. This makes their life hard and their investments seem nerve wrecking. But those who have their portfolios managed and know what they are doing, are calm and composed.

Every experience is a teacher . What I have learnt from my experience so far is that nothing in life, even the stock markets falling is worth loosing your sleep over. You invest to make money, which is suppose to make life easier. But the outlook is different because people are having sleepless nights and tend to loose temper in places they are not supposed to.

Every investment has to be for a lifetime. Including education and equity markets. Hence when we have a long term goal in the markets, short period termoils should not bother us and its not worth it. Their are hurdles before the big win. These are just the small ones.

Have a great day !!