Stock market, Volatility, and the Human Mind

Fear, Uncertainty and Anxiety were necessary human emotions to experience for our ancestors because their life was at stake on a day to day basis. We needed fear to evade danger. In order to survive, we had learned to work together in a tribe and trust the experts in our communities to give us guidance. More than a 100,000 years later, our fear of wild animals and opposing tribes have been transformed into Fears of debt, of not achieving our goals before we die and a fear of an unfulfilling life. Our jungles have been changed into concrete and is slowly transitioning into the digital realm permanently as you are reading this.

However, the reason we are alive today on this planet is because of how our ancestors chose to respond to the uncertainty and volatility around them. Similarly, it is our duty to respond to the uncertainty in our lives, the right way so that we may provide a safe and fulfilling life for ourselves and our children as well. It is with this same principle and essence that we should also view the financial market with regards to achieving our financial goals.

In laymens terms, in order to build Financial Wealth we need to invest with a long term view. Hence the essential key here is ‘Patience’ and not reacting emotionally when triggered, when the market is not trending to your favour. Human Beings will always want to maximise their profits, and they experience fear and greed in the process of doing so. Both emotions are huge deterrants for gaining any type of profit, let alone maximising it.

The best medium to invest in for maximum returns is the Stock Market. Why is that ? It is because the Stock market is Human Capital working at its collective best. And nothing will give you better returns than Human Beings working together for a common cause. In a developed economy, the market might give you 10-20% in returns, whilst in India it will fetch you 12-15%. The difference between an investor with short term losses and one with long term gains, is ‘Discipline’. A major added benefit to your discipline will be experience tested Professional Advice, which is the biggest asset and wealth of Shree Consultants.

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