Let’s Take A Time Machine

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Let's take a time machine

It’s Diwali 2025. Shweta & Akshay are driving for their annual card party get-together with friends. An excerpt from their conversation.

A: I love this car! Every time I drive this, it feels so good – it’s absolutely amazing.

S: I am sure! Glad we went ahead for this couple of years back. These E-vehicles have totally changed the landscape of automobiles in our country.

A: Certainly… and also helps our country save in a few billion dollars of all the oil imports!

S: Haha… Yea…true…. Mr. Economist Husband! You can bring in the economics in everything we talk.

A: Yea…it’s my job my darling Educationist!! Haven’t you felt the remarkable changes in your work area? The entire education sector has lapped up to technology like never before. What seemed as a stop-gap arrangement to maneuver through the pandemic blues few years back, has become the new normal now.

S: Yea, the education landscape has totally changed post the pandemic of 2020. I see my students – face masks, sanitizers, social distancing and maintaining hygiene with greater caution. All this has been engrained so well to the young children. They are hands on the technology – and most exciting is they are more concerned and more aware about the social health and environmental issues. The virus outbreak of 2020 seems to have changed so much for us Indians. It was so scary back then…. I often reminisce about the chaos year 2020 brought in for us.

A: Chaos year??!! You always like to look at the glass as half empty. Look at the positive side as well. I see an opportunity that could have been reaped much better. Look at all the progress our economy has made since then. In May 2020, who would have imagined that Sensex would cross the iconic 50000 mark by 2022 and who be nearing the 60000 mark by 2025. Its over 100% jump in the Sensex from the nadir it created during the covid-19 impacted period in 2020. Sitting today I can easily say that it was really silly for most of us to stop all our SIPs at that time. By the time we decided to resume our SIP investments, we had lost out on most of the sharp dips – which could have been such lucrative entry points.

S: Yea… you are right. It’s really important to keep calm and not panic during such times. In hindsight it truly feels good for our slightly delayed but cautious investment decisions. After all, Better late than Never. An even analysis proves this – be it the Global Financial Crisis of 2008 or the Covid-19 impact in the world markets, the volatility experienced during those few months scared most of the investors. But if we behave as long term investors, we must zoom out on the entire chart of the equity markets – that clearly highlights the recovery, rebound and rise of the markets, indicating its resilience from such shocks.

A: True… look at our portfolios. We have made such good gains since 2020. The investments made then are reaping us good returns. You must thank those investments for our last year’s Masai-Mara’s adventures!!

S: Haha….absolutely… it was so much fun!! And look at the other asset classes as well…gold..?? It has shown such amazing returns over the last few years. I am so glad we made those investment in 2019 in the Sovereign Gold Bonds. We are benefiting from regular returns plus the appreciation gains.

A: True… that’s why it’s important to sensibility diversify the investment portfolio. And always believe in strategic SIPs, and not just standard SIPs. Enter the market – whatever be the investment asset – at the right time! Look at ESG investments that had become the flavor of all investors five years back.

S: Absolutely…even we try to sensitize our children at school about the environment related issues. The world has been witnessing so many environment related issues – global warming leading to bushfires in our forests, melting of glaciers causing unprecedented floods, earthquake catastrophes, and so much more. The corona virus totally shook the entire health system of the world – sensitizing people and corporates towards social responsibility took a totally different meaning since then.

A: Yes, after all we all are stakeholders of this planet. We must take care of it and keep the same in mind while making prudent investment decisions.

S: The market has rewarded stocks with steady business performance and quality growth, irrespective of their market capitalisation. Companies with good, clean managements were rewarded handsomely by the markets.

A: Also, look at the pace at which investments in international equity and digital assets has risen in last five years! We couldn’t envisage this rapid growth at that point in time. These are becoming an acceptable asset class for any retail investor’s portfolio diversification!

S: Absolutely! Lesson learnt – One should ACT not REACT. Long-term investment success is almost totally a function of how one emotionally handles declines in the equity market, as opposed to how one’s portfolio handles them.

Shweta and Akshay may still take some time to reach their destination. Meanwhile, let us not miss the bus!!!

Swing back to the present now – August 2020, and catch up on the opportunities that are being thrown up in the markets.


Also Read on FinMedium:  (Quoted: Cosmopolitan - June 2020) Panicking about Markets?

Dr. Tarunika Jain Agarwal Ph.D.

Alpha Research

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