By Irshad Mushtaq
Investing in the financial market requires a great deal of patience and discipline. Significant fluctuations are normal in the market, and they are actually beneficial for stock market investors. Unfortunately, many investors tend to panic due to fear and greed, leading them to sell their quality investments at very low prices.
In the stock market, patience can play a significant role. Engaging in diversification and systematic investment plans in mutual funds can assist in cost averaging. When investors engage in diversification, they often sell stocks for small profits or get stuck with certain stocks, leading to fear and a loss of trust in the market. At times, investors even stop their systematic investment plans when the market is falling , and they may choose to increase lump sum investments in shares at an inopportune time. It is important for investors to realize that some stocks may remain stuck for up to 3 years, and this is a normal part of business. The overall goal is to ensure profitability.
For example, a Chinese bamboo tree does not show any growth in the first 3 years, but it experiences significant growth after this period. Just because there is no immediate return, it is not appropriate to become frustrated. Patience is key in stock market investments, and maintaining discipline is crucial.
- Author is NISM qualified, Mutual Fund advisor and distributor having experience of 18 years in financial market