Even in the best of times, which these certainly aren’t, stock investing is the ultimate test of patience. It’s an investment that yields the best and most certain returns when you invest for the longest period of time. But it’s also the only investment whose value is available on a daily basis with minute-to-minute updates during trading hours. This contrast between the ideal tenure of investment (longest possible) and updates on the value of investment (shortest possible intervals) can test the patience of a saint and endurance of a camel, leave alone the ordinary investor. Every big fall or rise in the value of investment can be a call to sell or buy. Things become even harder when times aren’t good.
Depending on when and where you made your stock investments you are in one of the two situations: your investments are in outright loss or their value has fallen from the peak they touched in December or January. In both the situations you are wondering what to do? Sell to cut losses? Buy more to increase future profits? Or hold what you have and shut your mind off stock markets for some time? You don’t have to be a stock investor to be in this dilemma. Investors in equity mutual fund and life insurance policies (Ulip) share this anxiety. The question is where are we headed?
Actually, that is not the most relevant question to ask. Before we ask where we are going, we ought to know where we are—both in terms of our investment goals and in the cycle of stock market and the economy. Being conscious of the present is more helpful than attempting to know the future. That means relooking at your entire portfolio of investments, revaluating your net worth, your financial goals and how much time you can give to your investments to grow. Remember, you can’t predict. But you can prepare. This is where our cover package comes in. It is a carefully selected set of features to address the most relevant questions in every stock investor’s mind. In particular, read every word of Prashant Jain’s essay, not just for the advice it contains but also for the analysis of stocks, sectors and the economy. Whether you agree with his conclusions or not, you will understand concepts of risk, reward and stock indices much better. The straight message is—be prepared and be patient. An American stock analyst has said: "The stock market is a very effective mechanism to take money from the impatient and give it to the patient." Decide what you want to be—the giver or taker.
