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Stop predicting & attain investment nirvana

Author: Balaji Rao/Wednesday, September 12, 2018/Categories: Financial Planning, Expert View

Stop predicting & attain investment nirvana

Most people think they are one step ahead of Nostradamus because they keep predicting. The common prediction in the stock markets is that markets have “peaked” which is quite funny actually. When the Sensex was ruling at 33000 not so long ago, they said the market has peaked and it will fall and then one should “enter” the market. Then at 34000, again at 35000, further at 36000 and again at 38000, the prediction of market “peaked” did the rounds. Currently, the Sensex is trading just shy of 39000 unperturbed by the naysayers’ predictions.

Poet and philosopher, Lao Tzu, famously said, “Those who have knowledge don’t predict; those who predict don’t have knowledge.” Quite right indeed! What’s this business of predicting? Is it to scare, influence or convince someone? Did anyone predict the unfortunate 9/11 event? Did anyone predict Satyam Computers accounting scam? Did anyone predict the announcement of demonetisation? Did anyone predict the downfall of Kingfisher Airlines or the debacle of Vakrangee Software or PC Jewellers? Did anyone predict the stellar price rise of HEG stock? Did anyone predict the exit of Infosys’ Vishal Sikka or the exit of Tata’s Cyrus Mistry? Not a single soul were able to predict beforehand any of these events. Predicting is utter nonsense. Even if the market falls after anybody’s predictions, it would only be fluke, nothing more to it.

Nobody should predict anything about the market, because it is just not possible and it is none of our business. Yes, people appear on televisions, radios and other media platforms and make predictions; it has become a terrible habit and hapless listeners listen to these predictions and even take action based on such baseless predictions.

As investors just ignore any sort of market predictions, these are just another “noise” in the market space. Your duty and responsibility is to invest and stay invested until your goal or objective is achieved. If you have bought a stock at Rs100 or invested in an equity mutual fund at Rs50 NAV and if the market falls, what may happen? The stock price and the NAV may fall in line with the market. Fluctuation in the market is always two ways – up and down, so at the time of investment itself you should be aware that such fluctuations may affect your investment value, both negatively and positively.

You should achieve investment “nirvana” as an investor; don’t celebrate when your investment goes up or grieve when it comes down. Research the stocks and mutual funds properly before investing and make sure you are doing the right investment. If your choice has been right the market fluctuations should be ignored. Further, if you have invested with a 10 year and above time horizon, should you really worry if your investment falls?

Do not waste your time looking or seeking for market predictions. Research thoroughly and buy and stay invested should be your mantra to be a successful investor.

The author has written 6 books on investing and personal finance. He has 23 years of experience and 6 years in academics

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Balaji Rao
Balaji  Rao

Balaji Rao

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2 comments on article "Stop predicting & attain investment nirvana"


9/12/2018 6:43 PM

Nice article

Balusu Raghu Ramaiah

9/14/2018 4:34 AM

Good explanation. You may recommend some long term stocks for safe investment .

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