Investor Psyche: Moot Point or Mute Point?


Author: Kunal Damle

Lately with all the negativity; both economically and politically, it certainly is a very uncertain time to be investing in any asset class. Cash is indeed king. Rhetorically, should one look beyond all the white noise or should one be concerned by being inundated with every news flow and event that occurs?

With the advent of the information age, news flow has got a lot more faster and therefore more efficient. Twitter and/or other news wires available on our all our devices tend to sway investor moods with the news flow. But as an investor, one does need to look beyond all the white noise and differentiate between value traps and cash cows.

In India, the stock market this year has suddenly turned ugly with both the indices falling off the cliff and investor mood getting very jittery.


Source: Bloomberg

Now, relatively speaking have things suddenly got a lot worse this year or were they just a lot better last year? The benefit of hindsight shows the true picture lies somewhere in the middle. So how does an investor look at it for their investments? With the benefit of experience, now I would say don’t focus on the headlines/sensationalism and look at the original story.. do you still want to be invested or not? Stay the course and stay invested, in time this will generate a decent return and bear fruition. Discipline always pays off as long as the company invested in is fundamentally strong.

At the end it would be wiser to focus on the fundamentals rather than focusing on the noise that surrounds the financial market place. Over the next few posts, I will emphasize on what it means to focus on the fundamentals.

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