Staying in the Bull market


Facing the Bull


Usually investors are nervous during bear market.

They pray to God daily to see an end to this daily torture. They long to see a light at the end of the tunnel.

They read newspapers and watch TV 24/7 to hear a good economic news that will bring happiness to their portfolio. Some cancel their new investments. Some end up throwing the towel not able to bear it any longer. Very few sell everything and promise not to come back to the stock market never ever.

The Bull market is supposed to be just opposite. We pray this to continue for ever and we don’t want any one to topple the apple cart. Stock Market behaves as though it is on high and doesn’t bother about good news or bad news. For every news it just goes up.

Gala time for everyone, right?

No. Surprisingly even when market is in bull phase, going up daily, some folks become nervous. They like to stop SIP. they like to cash out in the name of booking profits.

This is very wrong. I will explain.

Either you be saint like Warren Buffett, not to worry about bulls and bears and go about living your life untouched by these stock market event
Or be a mortal, feeling happy when the market is going up and unhappy when the market is going down.

There is no life if you have to be nervous in the bull market in the same way you would be in the bear market.

You realize what goes up will go down. You understand market phases are a cycle and it is normal.

Ants eat for the day and save some for the rainy days. We, investors are like ants in the stock market.
We must save (investment growth) what market provides now during the Bull run.
We must also know that come bear market,we need to spend some of the savings (lose some of the growth made).

If you try to stay out or try to take profit now and move to cash, you will have nothing to spend later in rainy days.
( bear market).Let us enjoy 15-20% growth now to give up 5-8% later. We keep the rest.

This is how you play the Bull market.

1 Response

  1. SARAVANA BAVA says:

    Dear Sir – Good Article but I believe in Valuation. At present, whether US or Indian Equities, the Valuation is pretty high and we never know when the bubble will break. As we know, when it breaks, it will go down a lot. As a Valuation Fear-Monger, why can’t I just sell 50% of my Equity Holdings now, Keep in Cash which generates 3% return and when the bubble bursts later (May be in 1 year or 2 year or 3 years time) and when Valuation screams BUY, I just put all the 50% Cash back in the Market at one single investment and forget the Market then. I know, it’s Market Timing but for me I call it as ‘Valuation Timing’:-)

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