This is the time that most retail investors lose patience, panic and hit the sell button. If you did that, you may not be wrong. But then you may not be right either.

Remember the best money managers (no not a businessman like Warren Buffet) have done well by protecting the downside in their clients portfolios.

I sold Tata power, L&T, Hdfc not because these were bad companies but they had got ahead of their fair valuations – and by a mile. I was proved right in L&T and Hdfc (they are down more than 20% of my selling price) but I am not much in the money in case of Tata Power.

I have no clue as to where the market is headed – I have a “Technical Report” predicting a Sensex of 9800 and another report predicting 9000. I do not know whether this will happen. However I am convinced that there is enough alpha (or how a fund can outperform an index) and some smart managers can capture that.

You could be smart and continue your SIPs (like I am doing) or be foolish enough to stop the SIP. However, if the market stays down for say 4 years your stomach will be tested. For most investment returns IQ necessary is less than 100. However, in real life IQ above 150, harms your investment returns.

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