A lot of people talking about withdrawing their equity investment or exiting from it because the market went down, but is it a good idea?
I am a long term investor that does not mean that I am not worried about my investment. My investment from 10% positive has gone down at 25% negative in just about a month. It seems like the Virus is gonna stay a little longer unless Medical science develops a vaccine, we all humans develop an immunity against it or it just disappears somehow. The last two are just hypothetical, the first one is very much possible because we have advanced medical science all over the world and scientists are giving their blood and sweat to find a cure for this deadly virus.
Now given the time, it will take to create a vaccine that might be close to 12-18 months people thinking of withdrawing their retirement investment to avoid further losses which are actually rational thinking.
But being an investor you should know that ups and downs are part and parcel of the market. This phase is not permanent and after every dark night, we see a ray of new sunshine.
We should remind ourselves about the 2008 crisis where we have seen much more bloodbath on the market when it went below 50%. And whoever has withdrawn their investment have not recovered their losses because after a year or half market was again back towards its upward journey. You might be thinking like an investor that this time it would be different, but my friend redeeming or exiting from your portfolio causes the actual loss whereas staying invested will give you the time to recover from your loss or even giving profit to you.
How I am staying invested even after a 30% loss.
- I have not exited from the market.
- I have not cancelled any of my SIPs.
- I am investing more (a small amount) after every dip to average out my investment.
- Hopeful that tomorrow will be a better day for the markets.
- For liquidity, I have around 3 months of my paycheck money in my savings account.
- 30% of my total investment is in a debt fund, which is increasing day by day so I do not have to withdraw my equity investment if I need money.
How you are staying invested, what's your strategy?
In the past 3 years I have lost more than 75% of my portfolio's value. Now in the past two months it was even more bad hit. I'm not going to do anything about it. What is gone is gone so I'm just going to wait. While doing the investment I had only one thing in my mind that my real life shouldn't be dependent on this money. So, whatever happens I'm going to stay invested and not going to quit now.
If I were you, I would have average out some of the good names. Like HDFC and SBI I am just averaging out because I know they will give me positive returns in the future once everything goes well.
Trust me, I have done lots of averaging. But when the price goes to 25% value of what I bought in the first place, even averaging won't work good. My initial investment as well as the money that I further invested for averaging, both are now sleeping because of the current market situation. I even reached a point where even averaging was a mistake. 😀 Let's see how it goes.
I can understand :p
Pretty much same boat sir 🙃
I guess it will take a lot of time for us to recover back. Let's wait with some patience. 😀
😁👍
I'm a fairly new invester and starting buying stocks now. Hope I'll be able to make a profit.
Surely you will, just don't put everything at once. Say for example you want to invest 10000, try to divide it to 4 installments and then invest that 2500 with every dip.
Luckily my investments were not badly hit by the virus. But some wrong decisions I made 2 yrs back. Had lost more than 50% of my investments, recovering very slowly. The avg technique works and leaves my pockets empty lol
I too have made bad decisions in the past, but I don't regret much as long as I have learned from my mistake. Just today I have got a big hit when SBI Card plunges 15%, but still, for my long term perspective, I think it's a good share.
True, check point is all my investments are in US, not sure how long I ll hold them coz of uncertainities 😊