[Thread] In the last few years of this bull market, the message of #MutualFundsSahiHai resonated a lot. Too many people entered the market with SIPs.
Today, all gains of SIPing in the last three years have evaporated (and turned into losses, so gains closer to 5yrs gone).
I have been bearish on the Indian markets for quite a while now because the fundamentals have deteriorated significantly. But money kept being pumped into the market, keeping valuations high for the top stocks, making them look better than they are.
Like in 2008, it took a black swan to bring everything crashing down. There’s always an event and people blame the event, but the reason it’s crashing is because it was crazy overvalued!
#coronavirusindia contributes, but it’s the fundamentals at the core that are causing it.
The reason I write this thread:
This is about to be the biggest potential wealth transfer in over a decade. Things have been too expensive, but they’re getting saner.
For those with cash on the sidelines, there will be a recovery and the time to build is coming around!
For those who’ve diligently SIP’d for the last 5 years, now is the worst time to stop.
Markets are finally reasonable. Continue, and even increase. Don’t ge bogged down with notional losses.
You only lose when you sell (markets, individual stocks are different).
Also cash in the bank is about to be a whole lot less valuable. That’s a topic for another thread though!
As is to be expected, que cliched Buffett quote:
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