Let’s say, you were driving from Bangalore
to Chennai - a distance of 300 km, expected to take 5 hours. Halfway into your
journey you realise that because of the excellent road and light traffic you’ve
taken only 1.5 hours to get to that point.
Do you
now:
1. Continue driving
2. Get off the car and take a bus
Silly question, right?
You’ll most likely tell yourself that now
you don’t have to worry too much about the rest of the journey. You may even
take a break for a cup of coffee.
Unfortunately, most people behave very
differently when it comes to investing. Worse still, we see investor behaviour
which is similar to looking at your watch every 1 km and asking yourself
whether you should take the bus. And a lot of investors actually get off and
take the bus as is clear from past experience.
This is because of a mistaken infatuation
with short term returns. Is my return low, or is it high? Should I Invest now
or should I wait? Investors worry when the Sensex is up and worry again when it goes down.
When you drive from Bangalore to Chennai,
there are going to be rare instances when you’ll be driving at 60 kms/ per
hour. most of the time you’ll be driving slower or faster. But getting to
Chennai in about 5 hours is what matters.
Similarly, your equity returns will vary on
a daily or monthly basis but a long term average return of 16% is what you’re
aiming for.
Don’t celebrate the 25% that you got in
March. It’s only making up for the 10% you got in January. Celebrate, instead,
that you’re now closer to your goal and have to worry less about the hiccups
that may (and will) come your way.
Celebrate your wisdom in staying invested
when your friends were either running scared or booking profit (a complete
misnomer).
Enjoy the journey and stop looking at your
watch.
Happy investing
Source:Scripbox.com
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