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:

Investors who panic and sell their investments during downturns miss massive wealth-creation opportunities.

Lesson: The most vibrant Holi photos never feature clean people. Similarly, the best investment returns rarely go to those who exit at the first sign of trouble.

Keep your all-weather colour arsenal by your side

Some Holi colours fade quickly, while others—especially those synthetic gulal —stay longer.

Systematic investment plans (SIPs) are like those lasting colours. When markets fall, SIPs help average out the cost and allow investors to buy more units at lower prices. Over time, this strategy smoothens out volatility and compounds wealth. The data backs this.

Even if SIPs showed short-term losses or lower returns during crashes, staying invested resulted in strong double-digit returns over time.

Lesson: Let your SIPs work through storms and sunshine. They add colours to your investments that will show their vibrancy in the long run.

The perfect moment that never comes

Have you ever tried dodging Holi colours? No matter how careful you are, someone can sneak up and throw a fistful of powder at you.

Timing the stock market is just as tricky. Many investors read charts, follow gurus, perhaps even check planetary positions—anything to find that "perfect entry point" so that they can buy at the absolute bottom. But the truth is that no one can accurately predict how low the market will go during a downturn.

Lesson: Instead of attempting to time the market , focus on staying invested through monthly SIPs and letting compounding work its magic.

The joy is in getting messy

The colours of Holi wash away eventually. Similarly, market turbulence subsides. What remains is the joy of participation and the growth that comes from staying the course.

So this Holi, don't just celebrate with colours—celebrate the power of patience, consistency and long-term investing. Raise a glass of thandai to market volatility because, in the end, the ones who stay invested emerge in the brightest shades of success.

Also read: My favourite stock is down 30%. Here's why I'm buying more

This article was originally published on March 12, 2025.