INVESTMENT: Overcome fear when managing money

Do you know why people lose sleep or press the panic button on seeing their mutual funds or stock market investments going down, especially in the current market situation? Investing or dealing with money is linked to our behaviour than anything else. Just as most of our actions and decisions are driven by our subconscious mind, that is, our belief system, the same is the case when dealing with money. It is interesting to know how this belief system is formed and how it works especially the Indian scenario.
Most Indians, especially those born in the 1980s or before, have not seen their parents and others investing in stock market or MFs. What they saw was investment made in fixed deposits, insurance, Public Provident Fund, Employee Provident Fund, National Savings Certificates, etc. And for a long time stock market investments used to be considered as indulging in “satta”, that is, speculation. But in the last few years, thanks to the growing awareness, people have started investing in stock market, especially via the MF route.
But whenever stock market fall and investors see their investments going down (as we have seen in the last year and a half), they feel helpless or press the panic button. They also think about pulling out their money from equity investments.

Many a time people end up doubting their investment decisions and also start thinking that they would have been better off had they invested in an FD. But you need to know that this is never an apple-to-apple comparison and there is no need to worry about your stock market or MF investment. It will give you returns in the long run provided you spend some time in the market, rather than thinking of timing the market.
In fact, you should use the market corrections to create a portfolio of your lifetime, because that’s the inherent nature of the stock market. And Systematic Investment Plans (SIP) and investment in MFs via Systematic Transfer Plans (STP) route is the best thing you can do as an investor.
Do not worry about your investment decision and stay put. But that is easier said than done. Often, when faced with equity investments losing value, investors end up taking impulsive decisions that destroy their wealth creation process in the long run.
Unless you accept the fact that investing in equity or MFs carries an inherent risk that only gets mitigated with the time you remain invested in the market, you would not be able to come to terms with the fact that you are losing money and you should do something about it. Your conscious mind may say that you are fine with the risk associated with stock market investments. But deep down, the subconscious mind still believes that you want the safety of your money and higher returns. But you are not ready to take that risk. Until both are in sync, you will never be able to take a rational decision but more biased or impulsive decision.
You really need to develop the belief system that stock market investments are risky if done without planning and assessing the risk profile. Focus on understanding your relationship with money and the fact that you need to overcome emotions like fear or anxiety when it comes to managing money.