Falling markets: what to do?

A few hundred calls from friends, relatives, readers….have all had the same question on their lips. “What should I do now?”, “Will the index touch 9000?”, “Should I stop my SIPs?”, “When will the market recover?”

Frankly I have no answer to some of these questions. I realise that the real good fund manager (by whatever name called) KNOWS that he cannot predict the direction of the market, and even in case he can predict the market direction, he cannot predict the slope of the curve – how fast will it fall. It reminds me of Late Sir John Templeton’s remark “the Dow will surely reach 100,000 I do not know when!

So let us see what causes us to behave in such a manner? Well human beings know that in case of a dangerous situation they have to do something. Monkeys also behave in the same manner. Who knows this? Tigers know this. So when a tiger wants to catch a monkey it goes to the trunk of a tree and roars repeatedly. In fear the monkeys start jumping from one branch to another. Monkeys can jump well, can they not? Well they can, but in fear they crash against each other and fall prey to the tiger!

So know you know why most of us are like monkeys and Buffet is like a tiger.

So to let your portfolio to do well, just stay in your place…of course some of the basic structure has to be in place – that will be a different post!

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