1) The real challenge in a bear market is that at some point, you will get fooled thinking, you should have seen the decline coming.

Then comes a stage when you think the markets will go down but don't act and it actually goes down.

This is where the mind games begin.
2) You predicted the market would fall. It fell exactly as you predicted!

If only you had listened. Regret takes over.

Looks like the market will fall again. History shows no one can predict. But f**k history. You predicted the fall.

You utter the most dangerous words...
3) "Let me exit equities and enter later"

It falls further proving you right. False Bear market rallies make you more confident on your prediction capabilities.

And finally the real rally starts amidst all the bad news. You think its yet another false rally.
4) The upside rally provides some false downsides making you complacent that this one is just a false rally.

You are still anchored to lower levels. The market keeps rallying. Its too late. Regret hits.

"The market is disconnected to economy. This is wrong" you are angry..
5) This remains the story of most of us when hit with a bear market. The market humbles us yet again.

What should you do?

Always, keep a bear market plan ready and most importantly stick to the plan without double guessing it (whatever be the temptation).

Simple but not Easy!

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More from @arun_kumar_r

27 Jul
The policy response to the current crisis is unprecedented in its speed and magnitude. As a result, we have asset reflation in warp speed.

You can read the key takeaways from the recent Bridgewater note in the below thread..

bridgewater.com/research-and-i…
1) What took three years and seven months in the Great Depression took one year and six months in 2008, and only one month in the current crisis!
2) In the Great Depression, it took 3 years 7 months from Black Thursday before President Roosevelt broke the peg to gold, allowing the Fed to print enough to stop the free fall in equities and the economy, and the reflation continued for 4 more years before the next downturn.
Read 10 tweets
23 Jul
Here is a thread on evaluating Gilt funds:

For a detailed version visit:
fundsindia.com/blog/mf-resear…

It all starts with the simple question:

Is this the time to buy Gilt Funds?

Let us find the answer using different vantage points from 6 eccentric folks..
Here is a thread on evaluating Gilt funds:

For a detailed version visit:
fundsindia.com/blog/mf-resear…

It all starts with the simple question:

Is this the time to buy Gilt Funds?

Let us find the answer using different vantage points from 6 eccentric folks..
1)
QUICK GUN MURUGAN: Looks at problems using intuition, gut reaction, and emotion!

Reaction 1: Credit Risk Funds are going through several issues – defaults, downgrades, redemption pressure, illiquidity, concentration risk etc. Image
Read 25 tweets
18 Jul
Some learnings from past few months:

1) Handling bear markets finally boils down to psychology
2) Having a pre-defined what if things go wrong plan (when to invest + how much to invest + where to invest) creates the much needed 'feeling of control'
3) Having some debt allocation which can be moved to equities partially at lower levels - can help you change your frame of reference - you are suddenly waiting for the markets to fall to your pre determined levels
4) This is illogical as your remaining amount is down but works!
5) Inherent conviction on entrepreneurship (read as equities) to create long term wealth is a must
6) As things get bad and after each fall, the lure to predict exponentially increases - you utter the most dangerous words "the markets will fall further let me wait for clarity"
Read 8 tweets
28 Feb 19
1. One of the biggest issues in equity investing in India, is that most of us are anchored to the 15%+ returns.
2. The moment short term returns are lower or negative, we guess something is broken and panic out of the markets..
3. Unlike a fitness program, where we know it takes a lot of hard work for results, when it comes to returns from equities, we take them for granted.
Read 13 tweets

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