Covid lessons for investors: Ultimately discipline key factor

What are the financial lessons we learned from Covid 19

Lesson 1: Markets favors investors with long-term approach and patience

Investors who stayed Invested during pandemic 2.0 have made a huge gains. Both Nifty and Sensex had touched new highs and made many investors wealthy. When markets crashed in march 2020, many investors got panic and exited from the market. All those investors have really missed the opportunities. Normally, many investors don't have patience to stay even against a small volatility and will exit and turns there notional losses into real loss.

Lesson 2: Tuning Expectations

Markets will never move in same directions. When markets are over heated they require some cooling period and we can't build high expectations at those times. Just like in the case Covid every thought the pandemic is over as the doses were given. But later on we have seen some new variants. similarly though markets have given superior returns, near-term corrections can't be ruled out.

During those times we should stay in the market by making small investments regularly and nullify the volatility and benefit from rupee cost averaging.

Lesson 3: Develop knowledge and don't confuse by rumors

Just like rumors about vaccines for Covid there were lot of news about entry and exit when markets touched new highs. I recommend investors to spend quality time with markets and understand it dynamics. The more you spend time with markets the more chances of winning from trades and to make profits. Ultimately discipline is the key factor.

What Should be the FInancial Goal For 2022?

After going through the financial havoc caused by pandemic, I advise everyone to think of attaining two things.

To attain financial independent status: Even if you stop working after 15 years, your monthly expenses to be taken care of.

To attain financial freedom: This will prepare you for any unexpected expenses and enjoy with life style upgrades.

In order to attain the above stages one needs to have financial literacy and discipline. An investment of Rs10,000 per month in the instruments which give a return of 15 per cent per annum will make you to plan a retirement after working for 20 years with a decent size of corpus above Rs5 crores very comfortably.

Where to invest in 2022?

IPO Markets are going to be huge again. In 2021, we had seen more than 60 IPOs. Many more IPOs are going to come in second and third quarter of 2022. So, you can pick the best. Investors can also focus on pre-IPO segment. Investors can choose to make systematic investments in stock markets directly and can also focus on mid & small-cap stocks through mutual fund (MF) SIPs.

(The writer is Managing Director of Ticker Qube)