Bura na mano, volatility hai!

Holi is full of surprises. You step out in your oldest kurta —maybe that faded one from college—thinking you'll stay dry for a while. But before you know it—splat! Your neighbour throws a bucket of coloured water at you when you least expect it. You gasp, wipe your eyes and then grab a handful of gulal for sweet revenge. The stock market isn't much different. Just when everything seems peaceful, a sudden crash leaves your investments dripping red. Since reaching its peak in September 2024, Sensex has been down 13.65 per cent. But here's the thing—just like you wouldn't abandon Holi after getting drenched, successful investors don't abandon markets when things get messy. The first splash always shocks Markets throw surprises like that uncle who stockpiles water balloons days before Holi. One day your stocks are climbing, and the next, some Fed announcement or global crisis sends everything sliding. For first-time investors, the ongoing market drop might feel like getting a faceful of ice-cold coloured water—shocking and disorienting. Just as someone might wonder if they've made a terrible mistake stepping outside, beginners often question their entire investment journey during their first correction. Even veteran investors feel that momentary panic. The difference? Experience has taught them to take a deep breath, recognise the feeling and let it pass without acting on it. Lesson: That knot in your stomach during market drops is universal. Learning to sit with this discomfort, rather than reacting to it, is what separates successful investors from the rest. The ones who hide miss everything Some people lock themselves up in their rooms during Holi, trying to stay dry and untouched. But let's be real, you can't play Holi and expect to stay clean. By evening, you'll be watching everyone else's colourful selfies, regretting your decision. Too many investors act the same way. They bail out during downturns, converting paper losses into real ones. However, history shows that market corrections are temporary, while long-term investing brings real gains. Take a look at how the Indian stock market (Sensex) has performed after significant downturns of over 20 per cent: Market crash period Decline from peak (%) Recovery time 1Y return after bottom (%) 3Y return after bottom (%) Feb 14, 2000 to Sep 21, 2001 -56 2 years 4 months 16.3 115.6 Jan 15, 2004 to May 17, 2004 -27 6 months 43.5 217.4

This article was originally published on March 12, 2025.