Would You Want Prices to Rise or Fall?

Three Simple Questions to Start With:

1?? Imagine this: You’re a parent, and your child will likely get married in the next 10 years. Gold is an essential part of Indian weddings. If you knew you'd need to buy gold in the future, would you prefer prices to rise or fall in the coming years?

Fall, obviously. Unless you enjoy overpaying for things.

2?? Imagine you’re planning to buy a house in the next few years. Would you want property prices to go up before you buy?

No, you’d want them lower. Unless you're feeling extra generous towards builders!

3?? Imagine you’re investing in equity mutual funds for long-term wealth creation. Would you want markets to be high while you're still accumulating?

Of course not! Who wakes up and says, "I’d love to buy everything at peak prices today!"

Yet, when markets fall, most investors panic. But if you’re in the wealth-building phase, a market downturn is actually an opportunity.

Why We Love Falling Prices—But Only in Some Cases

When gold prices fall, Indians rush to jewellery stores to buy more. They don’t panic and sell their existing gold. No one wakes up and says, "Oh no! Gold is cheaper today—let me sell my jewellery before it gets worse!"

Similarly, when property prices drop, smart investors seize the opportunity to buy at a discount. You don’t hear them saying, "Oh no, real estate prices are down! Let me sell my house before it loses more value!"

But when equity mutual fund value declines, why do so many investors react with fear instead of accumulating more units at a lower cost?

Imagine someone running into a jewellery store shouting, “Gold prices are down! Sell everything!” Sounds ridiculous, right? Yet, that’s exactly how many react when stocks go on sale!

Think Back to the March 2020 Market Crash

Think back to March 2020, when the Indian stock market plunged due to COVID-19 fears. Investors who panicked and sold locked in their losses. But those who saw the dip as an opportunity and continued their SIPs in equity mutual funds are now sitting on significant gains.

I remember thinking at the time, "I hope markets stay low so I can keep buying at cheap prices." But as luck would have it, the markets had other plans and took off instead!

The markets, in their unpredictable nature, decided to surge 120% between April 2020 and October 2021.

Moral of the story? Be careful what you wish for.

If you’re still in your wealth-building phase, why would you want stock prices to rise too soon? Just like a real estate investor wants lower prices to buy more properties, a long-term investor should welcome market corrections to buy more mutual fund units at a discount.

The Market is Down—What Will You Do?

Right now, markets may be volatile. You have two choices:

• Panic and sell, locking in losses.
• See the opportunity, accumulate more through lump sums or SIPs in equity mutual funds, and wait for long-term growth.

So, what’s your move? Are you seeing fear—or an opportunity?

The choice is yours.

Questions Investors Are Asking Right Now

1. Should I stop my SIPs when the market is falling? No. Market downturns are the best time to accumulate more units at a lower cost. Think of it as a discount sale—but for wealth creation!
2. What if the market keeps falling? That’s even better for long-term investors—more accumulation at cheaper prices. If you liked it at ?100, you’ll love it at ?80!
3. But what if I need the money soon? If your goal is short-term, equity mutual funds may not be the best choice. Consider short-term debt funds or fixed-income instruments instead. After all, you don’t take a flight for a journey you can complete by car.

Need Help Navigating Market Volatility?

If your portfolio has fallen quite a bit and you're wondering what to do next, let's talk. DM me or book a call—I’d be happy to help you make sense of the market and stay on track for your financial goals.

?? Book a call here: https://calendly.com/ravinagrani