How to invest now? Shall we sell equity? shall we wait? Or Shall we buy more? are the biggest question coming in the mind of most of the investors in present market volatility. You must be worried & confused, how to go ahead? You would also want to take immediate action on your portfolio, as we have been trained to take immense actions whenever things are not alright. But always remember, sometimes actions which seems smaller has a bigger & better impact on the outcome.

“If a Boat is stuck in the middle of an ocean, the Sailor fixes the compass, but does not abandon the boat.”

When it comes to equity investing, things mostly go out of hand, if take immediate actions based on current market conditions. What feels right in present situation, might feel like a mistake after few days. So, hold your nerves & learn to benefit from the situation.

We must have a clear long-term strategy that is beyond present market situation, which is robust and works fine in all the conditions. It helps you to gain returns, as well as keep your emotions under control by reducing portfolio volatility. Equity investing is not just about getting higher returns, but is more about managing risk. But we often ignore managing risk when the markets are on a run.

Hereon you have 3 ways to go ahead, but you have to find the best path suitable to yourself.

1. Sell your equity investments
2. Hold your existing investments
3. Hold & buy more through SIPs & additional lumsum purchase

Equity investments are no different than investing in assets like gold or real estate. Every asset which gives higher returns than fixed return instruments have an inherent volatility. They also have an optimum time horizon to invest before expecting desired results from them. You have to hold your investments for that optimum time period & instead of going panic in in-between volatile times, try & take advantage of the situation.

Selling assets at a lesser price than the purchase, can most certainly not be considered as a wise decision. Like you hold gold & real estate in turbulent times, hold equity and wait for the wonders to happen in future.

It’s tough to hold equity investments though they give the highest returns in long term, but why? Because real estate & gold have a generic social value, and it gives us a sense of pride in holding them in physical form. Secondly, it’s not easy to sell real estate when the winds are not favourable as there is no set price benchmark & selling physical gold for most people is not considered auspicious. And above all, the daily disclosure of equity market price adds fuel to our emotions making us to sell. However, all the assets have in-between volatility in prices, but we do unjust with only equities.

Here is the example of Nippon Growth Fund which is one of the oldest fund in the industry. Let us consider few real investment scenarios in the fund by investors.

Scenario 1: Sell your equity investments

You will find many examples of equity investors who have sold a stock or mutual fund at some point in their life, which are now 10-20-30 times or even more. They have already sold them way back when the markets became volatile in the past. But why did they sell? They sold their investments because they started taking immediate actions based on their emotions & that action is often “SELL” at the time of uncertainty.

Suppose you have invested Rs. 500000 in the fund & sold it when the markets started to fall. You have saved your principle from depreciating in the short-term and must be a happy investor when the market falls further.

Nav Date	Nav	Investment Amount (Rs.)	Cumulative Units	Cumulative Invested Amount (Rs.)	Market Value (Rs.)
08-10-1995	10	500000	50000	500000	500000
09-09-1996	10.19	0	50000	500000	509500 (you sold at profit)
09-12-1996	9.29	0	50000	500000	464500 (feeling smarter)

Scenario 2: Hold your existing equity investment

Actions which will be considered wise in future are often referred as stupid today, as we are habitual of taking familiar decisions based on comfort. But we forget that future will always be different from present & what’s familiar & comfortable today might not be relevant in future. Only few have the vision to see beyond the eyes into the future.

Many business ideas & companies which were considered to be a fad earlier became big successes and earned a lot of wealth for their investors & founders. Like Flipkart, Bisleri, Ola, SpaceEx, EV, Byjus, Paytm & the list is endless. Many of these company’s earlier investors & founders sold their stake when the time was not favourable. But today they must be scratching their heads in disappointment.

There would be many such stories to be written & told in future as well. This time be a part of these stories as a writer & not as a listener.

Suppose you have invested Rs. 500000 in the Nippon Growth fund & kept your nerves when the markets became volatile. What would happened to your investment if you had hold your investments without listening to hype & noise in the markets.

Nav Date	Nav	Invested Amount (Rs.)	Total Units	Total Invested Amount (Rs.)	Market Value (Rs.)	Remarks
08-10-1995	10	500000	50000	500000	500000
09-09-1996	10.19	0	50000	500000	509500	Sold at profit in earlier scenario
09-12-1996	9.29	0	50000	500000	464500	Felt smarter in earlier scenario
08-03-2000	46.91	0	50000	500000	2345500	Time to rejoice, as you have hold your nerves. It paid well
08-10-2001	16.62	0	50000	500000	831000	Disappointed for not selling earlier
09-06-2003	35.93	0	50000	500000	1796500
08-05-2008	366.5	0	50000	500000	18325000	High confidence on the investment, as you have seen few market cycles
09-03-2009	183.38	0	50000	500000	9168990
08-11-2010	547.73	0	50000	500000	27386530
10-09-2013	424.14	0	50000	500000	21207175
08-01-2018	1235.91	0	50000	500000	61795735
08-04-2020	857.80	0	50000	500000	42889985
08-11-2021	2158.80	0	50000	500000	107940050
08-06-2022	1909.06	0	50000	500000	95452960	Your current value (9.54 Cr)

Scenario 3: Hold & Buy more through SIPs & additional lumsum purchase

Stock market is the only place where people don’t buy when the prices are cheaper. Isn’t it true? But why we behave in such a manner? It’s because either we started without having the basic understanding of the stock markets or we start waiting for the best time or price to purchase. But actually, market timing has no significant impact on our investment value in the long term & this behaviour can be considered as gambling not investing.

The best way to deal with stock markets is to go with rupee cost averaging concept, wherein we purchase mutual fund units regularly. This will reduce our risk in stock markets to a larger extent by buying more units when the market falls & less when it’s on the rise.

Suppose we invest Rs. 10000 monthly through SIP starting from 1995 & keep it continue till 2022. See what happens:

Nav Date	Nav	Total Units	Total Invested Amount	Market Value	Remarks
08-10-1995	10	1000	10000	10000
09-09-1996	10.19	11359.57	120000	115754
09-12-1996	9.29	14538.07	150000	135059
08-03-2000	46.91	40842.11	540000	1915903
08-10-2001	16.62	49128.25	730000	816511
09-06-2003	35.93	56654.04	930000	2035580
08-05-2008	366.5	61209.93	1520000	22433439	Low volatility & early recovery in the portfolio, due to regular buying.
09-03-2009	183.3798	61619.44	1620000	11299760
08-11-2010	547.7306	62134.24	1820000	34032825
10-09-2013	424.1435	62909.09	2160000	26682483
08-01-2018	1235.9147	63601.33	2680000	78605820
08-04-2020	857.7997	63851.47	2950000	54771776
08-11-2021	2158.801	63987.33	3140000	138135906
08-06-2022	1909.0592	64022.45	3210000	122222645	Current Value whopping 12.22 Cr

There is no best strategy in equity markets to generate returns, but there are many strategies to manage risk while investing in stock markets.

Inherent nature of equities includes risk, so it is utmost important to manage risk than going after higher returns. Balancing risk & returns is the key to achieving financial freedom, if you don’t want to take a chance in achieving your financial goals.

Which path you will take?