I’ve this mental hack which keeps me at peace all the time into stock market.
I myself mentally mark down my portfolio down by 50% of what the current market value is.
Even if stock market crashes tomorrow & my stocks quote at half the prices of today, I’ll be at peace because I’m mentally prepared for that.
Most people are not. They panic even if their stocks go down by 10% (10% downtick is absolutely normal in stock market).
If you cannot fathom the thought of your portfolio going down by 30-50% once in a while, then you’re not mentally prepared for the pain market has to offer you.
Better go for fixed deposits, real estate, gold in that case.
Markets go up a lot & likewise do down a lot too.
The problem is, >10 crore demats have been opened since Covid. And these people don’t have a clue what bear market is & don’t know how brutal bear markets can be, because they’ve not seen a hard core bear market.
Hence, people cannot think a stock going down by 50-90% (Which they sometimes do once in a decade or so). And they’ve gone down in 2008, 2020 in similar fashion. And that was not the last time. They may go down in similar ways in future too. When? Nobody knows. But I know for sure, they will.
The question is, can you digest bear markets while keeping your heads calm or exit at the worst possible time (low price)?
The key is in being mentally prepared & stable.
