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Markets & Life





Markets & Life

Fall free-fall, almost everything in the Indian and global markets was falling like there is no bottom in March this year and now it's rising as there’s no limit. Don’t worry while the market in the short term falls or rises let's take time and connect a few life concepts to the markets and try to change the way we view it.

1. On Unpredictability: can you predict what’s going to happen tomorrow or on any day after that with 100% accuracy? Leave alone the percentage but with any accuracy, can you? You can’t, now you still plan for tomorrow and that vacation and your future? 
Predicting the market movements is a waste of time because there are millions of people, institutions, algorithms interacting and each have varied timelines ranging from sec to years to decades and hence varied return expectations. This leads to severe unpredictability. 
Unpredictability is as normal as anything in life yet we take comfort in planning and get uncomfortable if something that we never thought of happens. Now this does not mean that we shouldn't plan in fact we should but at the same time be ready for bringing surprised every once in a while and be ready to face whatever is thrown at us. Be as prepared for unpredictability in the markets as you’re in your life.
2. On Letting go: A lot of people might bring out the worst in you, leave you broken or break you when you thought you have had it all, what do you do? You let those incidents and people out of your life and work on building yourself and your life again.
 Similarly, almost every time there’re going to be stocks that make you huge losses and dent your portfolio, have the courage to let those losers out and find new winners. The key is the ability to let these losers not affect you.
3. On ups& downs: Do you always succeed in life? The chances are almost none that you won't face difficulties or roadblocks in life. The rise in anything in life sows the seeds for its fall. A fall in stocks is as natural in investing as it is in your life.
The problem arises when you equate the fall to failure as you do rise to success. Treat both rises and falls equally, learn from the falls because rises won't give you enough lessons to learn and grow. If it weren't for our failures how would we realize the value of wins? Relax and keep working for when it rises again you would shine.
4. Gravity: The law of gravity is a universal law and it applies to stocks too. Anything that goes up drastically in a short time almost always sees a fall and drops down. The magnitude might differ but almost nothing in life or in stocks defies gravity. It is gravity that would teach you to be humble because nothing is going to keep rising.
 Realize that your stocks might come back to normal and prepare by either exiting or adding more when the do.
On an ending note realize that irrespective of how much research you do on stocks you’re not the one working hard or running the business (you’re not sweating it out all day). You’re just another provider of capital so be glad that you earn when the business does and get a ride in their profits.

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