Markets, it seems, have a twisted sense of humor. When fear hits the stock market and prices start dropping, the cautious folks wait on the side, scared things will keep getting worse. But when the mood flips and prices shoot up, even the careful ones get tempted to jump in, hoping to cash in big – a siren song lures. Here’s the harsh truth: markets don’t signal you when to enter at lows, and they certainly don’t guarantee safety at highs.

The allure of buying the dip is undeniable. The chance to snag bargains while others panic seems like a golden opportunity. But therein lies the trap. Identifying the absolute bottom is akin to predicting the future, a feat even seasoned oracles struggle with. More often than not, what appears to be the bottom turns out to be merely a plateau before another leg down. By the time the true trough appears, fear has morphed into despair, leaving even the most ardent value investors paralyzed.

On the flip side, markets excel at creating an illusion of safety of returns during bull runs. Everything seems to go up, fuelled by FOMO (fear of missing out) and contagious optimism. But, every bull market eventually meets its matador. History tell us, the higher prices climb, belying all fundamentals, the thinner the air gets, and the more violent the eventual correction. Those who get sucked in at the peak, blinded by the glittering mirage, are left holding the bag when the music stops.

So, what’s the takeaway? Short term market timing is always susceptible to whims and fancies of one and sundry. Everything matters, every small news, every geo political event, even a fall from stairs of a Fortune 500 CEO . But in the long run, as we all know, markets are slaves of earnings. As long as you are buying in an economy which is solid, in a sector which offers growth and the company which is well managed and has competitive advantage, you are poised to make fabulous returns in the long term. Even with those multiple peaks and troughs on the way!

Focus on building a sound investment strategy, not chasing market whims. Diversification, risk management, and a long-term perspective are your true allies. While markets may not let you in at the bottom, they also won’t force you in at the top. With end of the financial year bringing appraisal season and potential hikes and bonuses, our minds dance with the possibilities. The joy of a raise shouldn’t cloud our judgment. Be aware of emotions, biases, and values to make informed choices that align with your financial goals and true desires. By avoiding the emotional rollercoaster and sticking to your discipline, you’ll be better equipped to weather the inevitable storms and emerge stronger on the other side.

By-

Abhishek Dev
Co-founder & CEO