Prediction vs Conviction

In situations like what the domestic and global markets are currently going through, the bell weather indices across and global markets would navigate on global capital and news flows, economic data,progression on monsoon and political developments. For those investors who have chosen equity as part of their asset allocation to reach their long term goals like children education, retirement, etc. The resultant volatility and indiscriminate selling offer opportunities to buy good businesses at attractive valuations. Remain alert to tactically grab these opportunities in equities.

You are right. This is also a perfect moment for all sorts of predictions to unfold.

“The global stock markets are going to crash…”
“The world is going to plunge into a bottomless economic depression…”
“Get out of the markets before it is too late…”

So on and so forth. And there is an amazing range about the source of such prophecies – right from the chai wala, our neighbour, our stock tip friend, self styled investment gurus, the canny uncle,news paper headlines, TV shows, to the most learned analysts and economists. In any stressed times like this, it is better to understand that Investment advice is different from astrological predictions. I am not saying that all is right with the financial world and it never was and never would be. Perfect markets never exist. But remember that smart investors do exist at all times. The smart investor is the one who remains convinced with the basic objectives and principles of long term investing rather than to succumb to predictions of all sorts and lose track. Rational behaviour is the hallmark of our race, the Homo sapiens. It is the power to discriminate between what I know and how to go about the known and what I do not know and to accept that I do not have any control over such domain


Looking at the global environment, only certainty is the continued uncertainty and we have to learn to live with heightened volatility. Smart and savvy investors would do well to use volatility induced by global events to gradually increase their exposure and remain logged in to a structural opportunity in Indian equities and long- term bonds.

Of the many quotes in the financial world, I am very impressed by this one. This gives a clear
snapshot of volumes of understanding about the financial world and remains a dependable anchor
for the Smart Investor in his long term investment journey.

“Life is full of uncertainties. Future investment earnings and interest and inflation rates are not known to anybody. However, I can guarantee you one thing.. those who put an investment program in place will have a lot more money when they come to retire than those who never get around to it.”
– Noel Whittaker

S Babu Arunachalam

  • Total 30 Years+ Diversified Experience spanning banking, project management and the last 15 Years in Personal Finance/Training Services
  • CAIIB[Certified Associate Of the Indian Institute of Bankers]
  • AMFI[Association of Mutual Funds In India]Registered Mutual Fund Advisor

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