A JOURNEY OF AN INVESTOR

Markets have been observant for the flow of emotional parameters investors (more specifically retail investors) possess. 'Buy cheap and sell dear' has been uplifted as a point of view for wealth creation, which generally is not the case. Wealth creation has a vision taken and seen by many historical investors who not only made it possible, but also displayed many lessons and language of market that we can chat with. Investors seek many biases when they invest their money into a pool of risk where ROI can turn way much negative than one can imagine. Right picks at the right value & at the right time has depicted a wide angle wealth creation, given that patience has been key driving the investor.

There has never been a right time to panic and a wrong time to invest, given that right intrinsic value supports your projections of future cash flows. Being patient, disciplined and eager to invest even a dollar buck of you earnings consistently for a period of time can turnaround your view towards market.

Investment by the tern itself has a lot to say when compounding takes place. According to Great Scientist Albert Einstein, 'Compounding is the eighth wonder in the world.' Every investment needs patience and discipline to follow. Pursuing a consistent approach of dollar cost averaging may have terrific upside potentials, given that consistency has been maintained. Wealth creation has been a consistent approach of discipline and patience. Every $1 when invested, may provide you the ROI for your contribution towards that investment. Small investments can make big returns when followed on the right path. Still investors tend to posses many biases pre-planned in their mind. Biases act as a common trait in investing, but an emotional bias towards our capital can sometime be non-worthy. The behavior of your investment is much less important than how you behave. As an investor, being neutral with the market's volatility and a belief over your pick for the long term can turn things magically well at your end. If the research tend for a longer time on a stock than the fear of non-favorable conditions in the market as a repeatable thought for an investor, the chances for a good ROI improves. Also, a concern with respect to the corporate life cycle and corporate governance has been a top notch diluting area for an investor. Governance issue has always been on the top if we even tend to think for the best plausible instances like the Sahara Group, Kingsfisher and many more. Learning the management way to think for a business and the confidence over its holding over a business (better to term as promoter holding) can tell you even more finely. Even if your money has not tilt, if the pick and the time has been rightly driven with a good IV; investment will surely capitalize its return. Again, patience is the key for a compounding phase of reinvestment cycle of returns. Speculation on the other side of the mirror where investor sees himself is totally a different ball game. A short term point of view for a significant gain. Even in speculation, there is a hell more risk of losing the entire capital but we never get things risk free in an equity market. Don't prefer speculating as a punishable offense in your mind, it is very well done with a lot of research too. But an understanding is better to distinguish speculation from investment which brings us to our entire topic of discussion for investor's journey.

Indian markets have been hitting an all time high, which may tend investor to make a long call even for a short centric period. Because whenever market corrects itself, these sentiments may reverse. Starting from a juncture of capital deployment where every investor seeks to imagine an ample of ROI expectation to the stage of euphoria where market hits an all time high, this plausible sentiment is maintained very well. Things turnaround for many when markets improve its direction (may be inversely), anxiety, fear & panic are the most common traits an investor self develop when around the zone of different direction markets. Sentiments regenerate the emotional aspect of an investor towards future unpredictable happenings to a belief over company's management's ability. Investors give a disproportionate weight to the first piece of information over an entire detail of subject, which then termed as anchoring bias as the first piece of information acts as a reference point or anchor. This hurts the investor to absorb the detailing of the other side that he could see for an entire different picture of perception. Underestimating the flow of new information and tend to stick with old beliefs picturizes conservatism biasness of an investor. This can hurt an investor if any new information such as different view of quarterly result published by a corporate house. Disregarding the information and placing a tenderness with confirming the pre-decomposed beliefs displays confirmation bias. Many investors for the sake of proving their point of view right for a particular pick catches the favorable news for their pick and when it gets matched with their point of view, an imaginary ROI develops their journey of investing.

Above mentioned are one of the very common speculatory beliefs which are sojourn in nature and are not helpful for a long call on your investment. These beliefs are bound to occur but referring them beyond the boundaries of their existence can be harmful for a long investment cycle. The performed actions can take a call over some of these traits even when picked a wrong choice.

"A mindset is much more powerful than a brain as it get composed with principles" - Raghav Srivastava