This 1 Important Recovery is costing investors Real Money

Amar Pandit , CFA , CFP

The 2 recoveries that we all look out for are Stock Market Recovery and Economic Recovery. However, the most important recovery for an investor is his/her Mind Recovery.

3rd July_2020-09-09update
what really happens

The difference between the Stock Market Recovery and our Mind Recovery can be upwards of 40-50%.

To give an example or clarify this concept, the stock market bottomed out on March 9, 2009 at a Sensex Level of 8160 (Everyone at that time was still waiting for 6000 Levels). The economy did not recover for another 6+ months. By then the Sensex had rallied to 15689 (up by 92%).

We could not see the economic recovery till 2010 end by which time the Sensex was at 20500 levels. However, the mind recovered (depending on who you were) only in late 2010 or early 2011 by which time the Sensex was up by more than 100% from the bottom it had made.

I had quoted Peter Lynch in my last post. Here it goes again “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves”.

This time is no different and I am pretty sure the above Sketch This is what really happens might just play out.


P.S. I am by no means predicting the direction of the markets as I consider it to be irrelevant for the real long-term investor.