The battle between the bulls and bears is giving traders sleepless nights. Just when you think the bulls have gained the upper hand the bears attack…and vice versa. The market volatility of 2021 will surely go down in history. Even the best traders have needed a lot of luck to make consistent profits. “But the best traders also know when not to trade. In fact, it’s one of their best kept secrets” I think I’m a better trader today, and I like to keep company of veteran traders, traders who have been around for many number of years because then the sense of maturity in what they are doing. They know that avoidance of a loss and not trading for periods of time is as important as making money and getting profits out of the market.
I am not recommending you sell everything. I am recommending you exercise caution in the market. But if you’re a long-term investor, you have a lot of opportunities to make good profits. “You just need to ignore the day-to-day noise and stay focused on the big picture”.
That involves keeping your mind a safe distance away from daily the news cycle
Take the recent headlines about the Indian GDP. You would’ve found news headlines like these…
‘Indian GDP crashes to an all-time low’.
‘India GDP much worse than expected’.
What do you feel, immediately, when you read these headlines?
Do you feel something is horribly wrong with the economy?
Do you think we might be in for a recession or depression for years to come?
Well, these headlines are not factually wrong, but they don’t tell you the context we’re in. With the right context, the headline would’ve been something like this… ‘Indian GDP expectedly down due to the Covid-19 related lockdown ..But this headline doesn’t sound so interesting, right? That’s why you won’t see such headlines often”
In the real world, it always helps to have a balanced perspective. The same goes for the investing world as well
Don’t lose sight of this balanced perspective when investing in stocks for the long-term. It’s easy to get distracted by the short-term new flow. But as long as you’ve right a good job picking the right stocks at good prices, you will do well in the long-term.
So stay calm, The volatility is here to stay. Focus on buying high-quality stocks at the right prices. We will keep on creating wealth for you