Troubled Times for Indian Investors (and How To Overcome It)

The Indian markets are wreaking havoc into the minds and lives of many traders. Everyone has taken a hit in one way or the other.

Why do I say so?

Look around you – the TV and other forms of media have nothing but extensive warning sessions to give to the investors. Some days back, even Securities and Exchange Board of India came up with a notice asking investors to be vigilant during these times. The respected members of many renowned discussion forum for stocks and commodities are trying to get each others throat. In short, the situation is looking murky.

What should you do to stay afloat during these times?

According to me, these days are the best to check the relative strength of your indicators / strategies. The markets have become highly volatile. Every investor must have some form of strategy – the lack of it is pure financial suicide. A fair share of the investing community hold on to the notion that the stock exchanges are money minting machines. And that anyone could easily double or triple their profits just like that. Such thoughts are simply unjust.

Do not lose hope when you experience losses. We have to stay put and our intention must be to minimize the losses rather than making profits. The stock markets are always there. One week of not trading / investing will work out to be better only.

Do not blame the markets for your situation. Every market has a certain geometry that it has to follow. It is simply analogous to the sun rising in the east and setting in the west. No amount of crying / loathing will change the course of the sun. Likewise, the stock market falls because it has to fall. It has to follow the math. Besides, no one asked you to invest in the first place (I do not mean to be rude, but this needs to be addressed).

It is equally important to invest conservatively. The other day, I came across a forum posting where a guy is crying over losing 55,000/- by trading with SBIN. Whatever his methods were, they were faulty (I say so because he tried to trade in a highly volatile zone – a range where one should keep away when daytrading). There is no use crying over spilled milk – 55,000 INR is the average monthly salary of a middle class individual in this country. Imagine losing it over a couple of minutes – and that too on the stock exchange.

If you cannot resist the urge, continue paper trading (yes, just like what you used to do when you started this journey). Take time to fine-tune your methods. Concentrate on what you has given you profits all this time – and try to gather additional information about it. Back-test the strategies in order to harness additional levels of confidence.

Remain calm and composed while trading in these highly unpredictable markets. Do not let your feelings to run freely. Showing your anger to your family or other loved ones just because you lost heavily in the stock exchange is foolhardy. Instead spend some time with them – get that vacation / hang out with your buddies. Find some other way to pass your time rather than sulking over what you lost.

I hope the visitors take this post with the right spirits. 🙂

I will continue to add more inputs to this post as and when I get the time.

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