Thoda Aur

Taking a break from investing in the stock market

The 2020 lockdown has been a God’s gift for many. Especially to those who understood how to use the given time. For me, I utilised the time to reflect upon my financial situation. I took the time to read books and educate myself to come out of the problem. One of the solutions to my problem was investing in the stock markets. And I have been doing this diligently for
60 days now. But for the past one week, I had to take a break from the stock market and it showed me something important.

Trading vs Investing

I want to clarify that I do not trade. I am an investor. Meaning – I like to take part in a company for a long time and see it grow. Then why did I put in money every day for the past 60 days? That’s because when I started investing it was a bear market and it is a good time to invest. Every day I would see the price fluctuate and accordingly I kept buying the shares in less quantity. 

As the savings ran out I had to stop investing. The lockdown is going to be lifted very soon and when it does I need to have some cash to open my shop. My thumb rule is to save 20% of any income I get. But apart from the single-family member salary, there aren’t any other income. So eventually the investing had to stop. 

Discipline is key

I decided to discipline myself from taking money from the expense to invest. Before that, I felt a compelling need to invest every day. But ever since I decided to discipline myself I am enjoying the freedom of not watching the candle charts. In that week I saw the markets fall even lower. I feel to depths that I hadn’t thought of. But I felt handicapped because I did not have the money to invest. 

This is when I realised that what I was doing was wrong. I should have had some cash in hand to make use of such situations. By investing every day I did not get the best market price. Had if I had watched the market once in a while I could have taken the advantage when the markets fell.

Being prepared

The fear of losing out or FOMO is a condition of feeling left out. When I saw the bear market I wanted to make use of it without thinking about the future bear markets. Right now during the COVID-19 pandemic, the market hasn’t stabilized yet. I should have kept some breathing room for sudden investments. It’s great learning. A practical example which did not inflict too many losses. At least now I know that I will again get a chance and when it happens I will be prepared with some money.

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