Do you panic or do you invest?

Investor behavior during market correction

An investor’s approach is categorized depending on his behavior during the market correction. There are two kinds of investors, one believes in patiently waiting for his investments to reach its potential while the other panics and redeems his investments. The first type of investor has sound knowledge and patience to follow through his investments, he believes in long term wealth creation. The other investor does not trust in his investments due his lack of research and believes in short term gains. Learn the difference between the two to understand where you stand. Invest wisely always!

Investors who do not panic during market correction

During a market dip the first investor will choose to invest with the sound knowledge of a decline in the prices, to buy good quality stocks while staying away from the cheap stocks. It is like a plant that shows signs of drying leaves, it mustn’t be tugged but a patient effort will ensure a fruit in the end. This insight could lead him to a potential growth because the market is unstable and any given correction in prices should eventually rise back up for every good quality stocks. He firmly believes in the wealth creation which takes years and not in short term profits.

Investors who panic during market correction

The other type of investor panics or worries during a market correction. As he aims for short term profit or has invested in cheap stocks without spending enough time in researching before investing.  Even if he had invested in good quality stocks he missed the point that quality companies do require time to show its full potential and growth. However, the market always recovers to help your investments grow but he needs to decide to stay for a longer period.  It is like pulling out a dish before it is ready or cooked, what you get in the end is only undercooked food which hasn’t reached its full potential.  

Do you panic or do you invest?