Diwali is an occasion that brings joy and smiles! As the year draws to a close, the economy generally does better in the last two quarters of the year.

As a seasoned Market Observer at a presentation at the start of my career said, “Markets go up and down, your character as an investor is tested in between.” If we stay the course, we experience compounding. But of course, life is what happens when we make other plans, like Covid did when we were planning the next level of business growth.

Our discussion is limited to how we as investors regardless of our profession or business can grow and experience what we hope will happen. A couple of things matter when you need to look at the future and they can be done with some effort.

1. Stop looking at financial news

It may sound okay to know that things are not on the right or wrong side. Financial media tends to highlight the negative side more. Also, information overload tends to reduce our ability to think properly at least at the professional investor Levels. This is important for us to be able to respond to news in a manner which is less reactive.

2. Try to understand business models

Most people invest without understanding the business model properly. This results in mixed results. A couple of years back I spoke to an investor *** trader, and he said he decides to trade without understanding the Business Model at a ground level. He has experienced the above phenomenon. The basic principle is to be prepared.

3. Don’t buy on hearsay

Many times, we go socially to hear our friends brag about their best results. However, when you ask them about their worst trades they tend to discount back as it is a social custom to encourage at many places. This has resulted in some of our clients losing money.

4. Do your asset allocation properly

This applies to new investors who have just entered the market and even to more experienced investors! This makes sure we are ready for corrections which are part of the course! Also we can add more to opportunities which we have a higher confidence about!

If you are a growth investor

• 25-50 percent equity-oriented opportunities
• 25% equity with a value bias
• The rest in FD’s/debt funds.

If you are a conservative investor

• 50% debt
• 50% equity/equity-oriented opportunities
  
  

This mix helps you to weather the storm. That said the markets are a riddle and pose a challenge to all of us. Figure out your most suited response and ride the wave!

Also read: Practical tips for overcoming crisis and enjoying financial freedom

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