–
March 2020.
The country had just entered lockdown.
Roads were empty.
Shops were shut.
Every news channel carried the same red ticker:
“Markets witness biggest fall in years.”
Phones wouldn’t stop ringing.
Financial advisors across the country heard the same questions, over and over again.
“Should I stop my SIP?”
“Should I sell everything?”
“How much lower can this go?”
Interestingly…
Most of these investors had started their SIPs for goals that were still 10 or 15 years away.
Their children’s education hadn’t suddenly become five years closer.
Their retirement hadn’t moved forward.
Their financial goals hadn’t changed.
Only one thing had changed.
The headlines.
Psychologists call this Emotional Contagion.
Human emotions spread remarkably quickly.
Fear, especially, is contagious.
When everyone around us is anxious, our brain quietly assumes there must be danger.
It’s an instinct that helped humans survive for thousands of years.
If everyone in a village started running, you didn’t stop to ask why.
You ran.
In investing, however, this instinct can become expensive.
Markets don’t just react to economic events.
They react to millions of human emotions playing out at the same time.
One person’s fear influences another.
That person’s fear influences someone else.
Soon, uncertainty becomes panic.
And panic starts looking like wisdom because everyone seems to agree with it.
This is closely linked to Herd Behaviour.
Picture Source: https://in.pinterest.com/pin/751116044152131360/
When uncertainty is high, independent thinking becomes difficult.
Following the crowd feels safer than trusting a long-term plan.
Yet history tells us something remarkable.
Every major crisis has felt permanent while we were living through it.
And every recovery has looked obvious only in hindsight.
The challenge in investing has never been predicting uncertainty.
It has been managing our behaviour during uncertainty.
The next time headlines make you uncomfortable, pause before taking action.
Ask yourself:
“Has my financial goal changed…
or has only my emotional state changed?”
Because sometimes…
the biggest risk isn’t a falling market.
It’s making a permanent decision based on a temporary emotion.
