The secret to successful long-term investing is to be greedy while others are afraid.

The secret 2 successful long-term investing is to be greedy.

Long-term gains may suffer if SIPs are stopped during market downturns. Markets usually recover, according to data, rewarding investors who wait patiently. By accumulating units at reduced rates, rupee cost averaging contributes to larger returns when the market recovers. Continue investing to build money.

Panic frequently breaks out after steep stock market declines, which prompts many investors to act rashly. Although it may seem safe to stop making contributions to a systematic investment plan (SIP) or to cash out investments too soon, doing so can actually be harmful to your financial situation.

Rupee cost averaging is the basic idea underlying SIPs, and it is intentionally built to mitigate market volatility. In actuality, you purchase more units for the same investment when you continue the SIP at a lower market level because the Net Asset Value (NAV) is lower. This tactic guarantees that the accumulated units will generate sizable gains when the market eventually recovers.

Also Read : Stock market holiday: In honor of Holi 2025, is the Indian stock market closed today?

Why It’s So Important to Keep Investing :

According to a study by Baroda BNP Paribas AMC, the NSE Nifty 50 Index has experienced more than 10% drawdown* 13 times in the past 20 years. One year later, the index had a positive return in eleven of these cases.

Furthermore, the returns were in double digits in nine of these cases. The average return was a good 21 percent. There was not a single instance of negative return if the time horizon was extended to three years following the 10% drawdown.

Warren Buffett, the renowned investor, once said, “Be greedy when others are fearful and be fearful when others are greedy.” The statistics supports this statement. Staying invested enables time and compounding to work in an investor’s favor, whereas panic selling merely crystallizes losses. When the market panics, we don’t lose money. When we panic,we lose money.

One loses the chance to amass units at reduced costs when they terminate a SIP. Furthermore,leaving quickly at lower levels simply causes losses to crystallize. One consequently loses out on the possible profits from the subsequent market upswing.

Strategies for Handling Market Volatility :

Even though market volatility can be unsettling,it offers long-term investors a fantastic chance to review their holdings. To determine whether your present asset allocation fits with your risk tolerance,make good use of your fear. Bull market investors frequently follow the crowd or only focus on the most recent top-performing category when making investments,but each person has a different risk tolerance,liquidity requirements,and time horizon.