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Personal Letter To All The Investors

Dear Investors,

Good day!

You must all have been wondering why the market is witnessing a steepest fall, and what one should have done. You might have seen the fall before-much steeper than this, but now the fear factor had grown exponentially thanks to the fogged news of the media.

COVID-19 has become pandemic from epidemic, hitting not only our Market but causes a global recession. More than the Corona Viral impact, the fear impact is brutally devastating, creating multi-fold disruptions in world trade.

The most valued company in the country by market capitalization – Reliance Industries was at 9.53 Lakhs Crore 3 weeks back, but now plummeted to 6.72 Lakhs Crore. This is the kind of erosion the market crash did to the richest person of ASIA. He is calm not unnerved, because he is not going to meet out any long-term goal in the coming months.

Likewise, all the investors, should avoid getting swayed by market movements & sentiments. Just because the portfolio shows lesser value today, it does not mean this will continue forever ultimately wiping out entire money. NEVER EVER. The best way to address this issue is not to constantly watch the portfolio until the market is corona-free.

Similar thing happened in real estate, none of us worried or felt desperate to sell. Everyone believed that this is the rough patch and sooner or later it will recover.

Likewise, GOLD price was at its pinnacle in 2012, dropped drastically and never touched its 2012 peak value internationally. Still, people hold GOLD and hungrier to accumulate more. Now it has rallied nearly 30% in less than a year.

In life everything takes time. Just because somebody is keep flashing your portfolio value every day, that will not push all your long-term GOAL earlier.

Whenever you are in doubt, always look at the past and examine whether it has happened earlier. If so, investigate if it has recovered or not. In fact, it has happened many a times before, and eventually it bounced back much more stronger than when it fell. As long as our investment objective is oriented in long term, it is needless to give importance to something just because it is reported daily.

Let us not allow this fear due to market turmoil destroy your hard-earned money. What I try to emphasize here is you are not the lone investor, but nearly 5 Crore individual investors and the overall mutual fund size is 28 Lakh Crore. It is not a small money. I am really clueless how long will the impact be and it is anybody guess. But I would like to reiterate that, however the fall be, it will recover soon if you look back. There is not much change in most of the companies listed in the stock market, there may alter but the value of the company never decreases.

Year 1992 – Sensex down by 54% in a year and up by 127% in next 1.5 yrs.
Year 1996 – 40% down in 4 years and 115% in next year
Year 2000 – 56% down in my 1.5 years and 138% up next 2.5 years.
Year 2008 – 61% down in 1 year and 157% up in next 1.5 years
Year 2010 – 28% down in 1 year and 96% up in next 3 years
Year 2015 – 22.3% down in 1 Year and 25% up in next 7 months
Pained by the market rally, if you withdraw now – you are converting your notional loss into real loss and the chances of recovery takes much more time. It is time to show lot of patience and faith. Equity market needs just one good news to take direction.

Let us not forget, it is not only the market volatility, but our own actions are also equally detrimental to our dreams.

Remember, Amateurs built the Ark, Professionals built the Titanic”
This Too shall Pass.