The story is unchanged

There's a well-known quote from Vladimir Ilyich Lenin, one of the founders of the USSR, "There are decades where nothing happens, and there are weeks when decades happen." Since the early days of 2020, when China's health authorities first made a public statement about a 'novel coronavirus' being responsible for a respiratory illness in the then little-known city of Wuhan, it's been "one damn thing after another."

What makes it worse is that the stream of alarming events does not appear to be stopping. Last year, just as COVID started winding down, we got the war in Europe, then rampant global inflation along with higher interest rates, civil unrest created by economic disasters in dozens of countries, including our neighbourhood, and now a big uptick in the strife in the world's most unstable yet economically crucial region. One gets the clear sense that the wheels of history have suddenly started turning faster, and we may be in for years or even decades of large-scale changes.

Old empires are decaying, and new ones may rise, and it's entirely possible that we may be heading for some very interesting times. Of course, I mean that in the sense of the ancient Chinese proverb, "May you live in interesting times." There's another, even more ancient Chinese proverb that says, "Every Chinese proverb on the internet is not actually a Chinese proverb," but we'll discuss that later.

Since early 2020, investments have done quite well, except for the initial panic about COVID-19. Even so, these are unsettling times for any thinking investor. You can't just ignore the scale of events that are taking place. In fact, it feels daunting to be just about anything right now. March 2020 feels like a distant memory, almost as if it belonged to a different epoch. Within the investment landscape, I've always countered the notion of "this time, it's different." And yet, now I'm implying that our world has indeed changed! This might leave you questioning which perspective holds true.

My answer stays consistent and unaltered from before. Even though situations have evolved, the core tenets persist. A genuine transformation would mean a world where investing in underachieving companies is more logical than in flourishing ones, where the essence of diversification fades away, or where a one-shot investment consistently outweighs systematic investment plans (SIPs). You can be confident knowing that we haven't reached such a juncture, and it's doubtful that we ever will.

This is the opposite of the typical advice that you might hear. The common reflex is when a lot is happening, so surely, you should be doing a lot in response. It requires significant self-assurance to stand firm in such situations. It would be best if you had the confidence to appear misguided or out-of-step with popular opinion. This pattern repeats, most notably at the onset of COVID. Do you recall the abrupt market downturn in March 2020? Remember the frenzy of investors hurriedly withdrawing their investments, even the promising ones, only to rue their decisions just a short time later? You wouldn't want to make the same mistake.

The principles that have stood the test of time will still do so. Concepts like diversification and gradual investing (SIPs) have been the cornerstones of financial planning. Economic troubles usually limit their impact on some sectors. Even if stocks of companies in all sectors fall, the effect is generally less severe in many of them. The approach investors ought to take, their financial planning, and their decision-making should remain consistent. Just as importantly - and this part gets ignored often - the list of things you should not do is still the same. This is the part that people tend to gloss over because no one likes to talk about negative things, but it's just as important.

Facts change, but principles stay the same. That's the bottom line.

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