Wise Wealth Advisors

D.Muthukrishnan (Muthu), Certified Financial Planner- Personal Financial Advisor

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Points to remember

Posted by Muthu on February 8, 2018

1) Equity beats inflation and provides superior return over other asset classes in the long run.

2) Good years are more than bad years. Based on the past we can say 70% of the time it is good years.

3) Not possible to time the market. Need to stay invested through both good and bad years to reap the long term return.

4) 10% correction once a year is a normal. Should not be surprised whenever it occurs. Only non occurrence should be a surprise.

5) 20% correction once in few years and 30% fall once in a decade is also very normal. Need to live through this roller coaster ride to enjoy high returns which equities offer.

6) Better to avoid checking portfolio during the periods of market turbulence. Once a year review is good enough, more so during bear markets.

7) Need to withstand emotional pain during the corrections and falls. Any adverse reaction to emotional pain would convert temporary notional loss into permanent real loss.

8) Invest when you’ve money. Redeem when you need money. Ensure there is not less than 10 year time gap between both.

9) Have strong filters when you consume market news. If it is not possible, you would be better off ignoring such news and updates.

10) Patience, discipline and staying the course would ensure you reach your goals and become wealthy. Always work on developing these traits.

4 Responses to “Points to remember”

  1. Venkateswaran said

    True Sir. Nicely put.

  2. Shetty said

    this is the time for us…..to walk the talk…..

  3. […] Points to remember (Muthu) […]

  4. Manish said

    I have one quick question. I am sure we are not suppose to time the market, but since I am planning to do an lumpsum investment of 10L i wanted to know whether should we wait for this because the PE of the market is 24 and putting this amount in Mid Cap funds will be huge risky. Can i know your opinion. And to let you know the investment period of this lumpsum would be around 12 to 15 years.

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