If you have been feeling uneasy while checking your portfolio lately, you’re not alone. The recent market correction that started in October 2024 has left many investors uneasy. Even those who see themselves as long-term players are struggling to stay calm. But it’s not their investment strategy that’s the problem—it’s the constant flood of news, social media panic, and alarming headlines that are messing with their emotions.
As someone who has coached people through countless market ups and downs, I can tell you this: Fear in investing is normal. Markets fall, panic sets in, and even the most rational investors start second-guessing themselves.
Today, I’m here to tell you, just take a step back and relax. Market corrections aren’t the end of your wealth-building journey; they’re just part of the ride.
Why Do We Panic?
I totally understand, “Don’t panic” is easier said than done. Before we decide to not panic, we need to understand why in the first place we panic. It’s human nature. Our brains are wired to respond to threats. When we see our investment portfolio in the red, it triggers the same fear response our ancestors felt when facing real physical danger. We feel an urgent need to ‘do something’ to keep ourselves safe.
But understand this logically, this is not a physical threat like facing a tiger. You do not need to react urgently. In fact, reacting emotionally to market movements, without logical calculations, is like constantly switching lanes in a traffic jam. It might feel like you’re making progress, but often, you just end up worse off than before.
A Real-World Example: The Power of SIPs in a Market Downturn
Let’s take a real example. Imagine an investor who started a ₹25,000 monthly SIP in the HDFC Mid Cap Opportunities Fund (Growth) in January 2011.
Here’s how their investment journey looked:
- NAV on 31st Jan 2011: ₹14.736
- NAV on 30th Sep 2024 (Before correction): ₹195.23
- Portfolio Value in Sep 2024: ₹2,26,72,405
- NAV in Feb 2025 (After correction): ₹171.52
- Portfolio Value in Feb 2025: ₹2,00,11,465
That’s a temporary dip of around ₹26.6 lakh. Painful? Yes. But if they stopped investing or redeemed their funds out of fear, they would miss out on buying more units at lower prices—which is exactly how long-term wealth is built.
Now, let’s rewind to the COVID crash in March 2020:
- NAV in January 2020: ₹56.34
- NAV in March 2020: ₹36.45
- Many investors panicked and stopped their SIPs.
- By March 2021, NAV had bounced back to ₹73.21—more than double in just a year!
Those who stayed invested benefited the most. History has shown time and again that markets recover, and those who keep investing reap the rewards.
How Do We Control Our Panic Response?
Now that you understand how costly can your panic response be, let’s figure out what you can do to manage it effectively and stay in control of your investments.
Stick to Your Plan
When markets dip, it’s easy to feel like you should abandon the ship. But take a deep breath and remind yourself—your long-term financial goals haven’t changed. A short-term market drop doesn’t mean you should overhaul your entire investment strategy. Stick to your plan, trust the process, and let time do its magic.
Turn Off the Noise
News headlines thrive on drama, and social media can amplify fear. The more you expose yourself to panic-driven content, the harder it becomes to think rationally. Reduce your exposure to sensationalized news and doom-scrolling. Instead, focus on credible financial insights and remind yourself why you started investing in the first place.
See Market Corrections as Opportunities
Imagine walking into your favorite store and seeing a huge sale—would you hesitate to grab a great deal? Market downturns work the same way. When prices drop, you can accumulate more shares or units at a discount. Over time, this strategy helps build substantial wealth, as history has shown that markets eventually recover.
Remember, History is on Your Side
Every market correction in history has been followed by a rebound. The investors who remain patient and stick to their strategy are the ones who come out stronger. Instead of letting fear dictate your actions, remind yourself that downturns are temporary, but smart investing habits create long-term success.
My Take
Smart investing isn’t about avoiding market falls—it’s about navigating through them with discipline. You need to learn the art of recognizing when fear is taking over and remind yourself why you started investing in the first place.
The next time fear creeps in, revisit your goals, look at past recoveries, and trust the process. And, whenever you need a strong supportive hand to hold you and calm down your nerves, MoneyAnna is always there as a caring big brother.
