Wise Wealth Advisors

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

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Pain continues

Posted by Muthu on October 27, 2018

Your portfolios are going through pain due to this bear market. There is no way to avoid this pain. In fact this is the unavoidable price you’ve to pay for getting good long term returns.

My continuous mentoring is to make you emotionally ready and bear with such pains as and when they occur. All good things in life never come without some pain. We’ve often heard that no pain no gain.

Though it is difficult to predict, some generalisations are possible. Bull markets are usually long and bear markets are short. Around 70% of years markets perform positively. This year is one of those 30%.

If returns are linear and predictable, everyone would get rich. But we know only 1% can be in the top 1%. If you want to build wealth through markets, need to accept this roller coaster ride and lumpy returns.

The question naturally comes to mind is how long this bear market would last. If we can predict that successfully, we can time the markets and completely avoid pain. By now, being our client for many years, you know this is not possible. Markets can recover in few months or may even take a year or more. We always advice not to time the market but invest when you’ve money and redeem when you need money ensuring a minimum time period of ten years in between.

Good advice rarely changes and so I’m repeating what I always keep repeating. How you behave in bear markets decides your investing fate. If you sell during bear phase, you’re converting notional loss into permanent one. If you stop SIPs, you lose the opportunity to acquire units at lower price which would actually boost your long term returns.

Only those who have control over their emotions get and stay rich. For others it is a loser’s game. We want you to be amongst successful tiny minority.

What you need to do for being successful? Just bear with the pain and stay the course. That is all you need to do and this one thing differentiates between success and failure.

Remember bear markets are always followed by bull markets. This is the time to accept and live with pain for long term gain.

Avoiding pain is avoiding growth.

Interestingly accepting pain actually reduces it.

This is time for you to experiment and see.

Experience coming out of experiment is wisdom.

And it is the wise who ends up successful.

4 Responses to “Pain continues”

  1. kkr said

    Awesome once again sir!

  2. T CHELLAPPA said

    Your words are real painkiller. How soothing it is to read it again and again?

  3. Marc said

    Excellent piece but what don’t do with clients who are withdrawing every month to live, they have no choice but to lock in losses in a bear market?

  4. Sundaram said

    Sir,
    I hear this one percent rich in many financial papers all around the World.
    Who are these one percenters in India? (By wealth as well as by Income matrix).
    I suppose wealth is the ultimate determinant of a rich person and not his income.

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