Monsoon and Equity Investing!

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Hello everyone! My last post was regarding some quick tips for the new potential investors who are new to the world of investing! This post is regarding equity investing.

It is mid July, and it is been raining from a pretty long time! The weather is so mesmerizing when there are light showers and drizzles. But on some days it rains so heavily!

You cannot predict that whether it will rain or not! Will it rain on Monday?  Yes? …No? …Maybe? That’s a bit like investing in equity.

The IMD says it will rain on Monday but it doesn’t. When they do say it will be sunny it rains! Familiar story?

Well, Equity Investing is the same.

Sometimes it is up… Sometimes it is down! Some days there is heavy rain while some days there isn’t any at all! The prices of your stock may rise suddenly one day or they might fall.

Remember how there is rain for several days at a stretch followed by dry spells?

That’s just about what happens with stocks too! You get a rise and a rise and a rise in your stock price for a few days. But on other days it will be a fall and a fall and a fall.

So ultimately what happens when the season is over? If you are a Mumbaikar you will invariably hear that the lakes are full so there won’t be a water shortage this year. That’s what is called riding the volatility. The objective is achieved!

Why not carry an umbrella everyday rather than looking out of the window in the morning before deciding? Ride the volatility in the market and you shall come out with good returns! Don’t panic or don’t be in doldrums.

Another small note:

Do you travel on a flooded road in monsoons? No. You take a detour. Just like that if you know your stock has gone bad, it is always better to take a detour- a different stock!

More later…

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