Running & Investing : Dealing with Hills / Volatility 

Yes, incorporating hill running is a crucial aspect of preparing for a race.

Hill running uses different set of muscles and helps recruit fast-twitch muscle fibers, improves leg turnover rate, and appears to help runners fight off central nervous system fatigue.

Most importantly it helps to build mental strength and patience, which help runners to deal with incline.

Recent volatility in Indian stock market has created a wave of emotions in investors mind, primarily those investors who are witnessing their first market volatility cycle, making them emotionally nervous.

Moving against tide is difficult but not impossible.

It is imperative for investors to deal with this market behavior and detach themselves from being emotionally attached to market. Emotions influence :

Emotions influence :

· Our state of mind,

· Mess on our psyche, and

· Our behavior

There’s no thumb rule for defining bear markets. It is said that a correction of 20% or more by a index denotes bear market. Is it so ????

A data point to note here is – > 1/3rd of stocks have corrected by more than 50 % and another 1/3rd have corrected between 25% – 50%.

Stock markets don’t follow a linear pattern, they are like hills, comprising of incline and slopes.

So, can we effectively deal with volatility?

A big YES !!

First step is clarity. What are our goals and how long we will remain invested. Clarity inculcates ability to focus on goals and ignore market inconsistencies. Having said that we will still have to deal with our emotions.

We all love to buy in discounts, even running events offer early bird discounts during which about 60% runners enroll.

What will you do if your favorite stock is available at a bargain ?

Secondly, create buckets; invest based on time frame. Do you NEED those invested funds NOW? or you are acting on emotions / noises ?

Thirdly, don’t stop adding small amounts to your contingency fund, this is the time to average out your buying cost. Continue with your SIPs.

What we are experiencing is how the markets function or operate across time frames..

No pain no gain is applicable to investing & running both.

For every two steps forward the market takes, there could be a pause before markets could move forward.

In a nutshell,

· We need to cut off market noises,

· Avoid looking at our portfolio on a daily basis ,

· Stop reading that pink news paper and

· Stay the course – remembering ‘This too shall pass’.

Content : Ajit Kaushal