Correction is good provided you use them wisely!

Yesterday’s newsletter contained  power packed information. We were probably the lone wolf in the market to decry corrections. 

In  February, we predicted the bullishness of Indian market. 

As expected by us the market experienced a sharp sell off. Most Investors were flabbergasted by the correction as they expected the market to move up. Yesterday, all sectors closed in red and it’s  a good sign for the markets. Let’s enjoy the crash as it will bring back sanity into the markets. 

Investors should  understand that deep corrections are part and parcel of  the stock market. Investors may overthink and call every past decline as an opportunity and every current decline as the end of the world.

Investors become panic when stock goes down and generally the first thing rings in their mind is to book profit and runaway. We  can never achieve our financial freedom if we can’t digest any correction. Remember Raamdeo Agrawal held on to his 10 lakh investment in Hero Honda, Infosys and Eicher motors since 1990s to turn into 1 billion USD (₹8300 crore) in 2018. It clearly informs that we should look out to deploy money when deep correction happens instead of  trying to escape from the situation. This is the secret to build wealth in stock market. Of course all is well only when we hold well researched growth stocks with good management. 

When the market goes down, it feels  difficult to adhere to our plans. There’s a  tug of war between our emotions and our reasoning. Often we succumb to emotions as we are trained to think profit as gift of God. If you have to remain calm and cool  during correction you should write down the reasons whenever you buy any stock.  That way, when emotions grow strong and threaten to overrule our  goal of financial freedom, reason can prevail.  It can remind us that this current market correction was expected, and your financial plan is designed with this in mind. This is the only way you can climb up the ladder and achieve your financial goals.

Hope you understand the importance of research and stick to your plans even during correction.