There are always those two or three days in a five- to seven-year period that patient equity investors wait for. They wait for these days not just to see the value of their money go up, but also to quietly push back at the jibes of non-equity believers. The Sensex has gained nearly 8% in three trading sessions, wiping out the losses of a few months and the despondency that was beginning to set in, aided by the naysayers who had begun to escalate the “equity-is-useless" narrative. But mature equity investors understand that you have to be in the game to profit from it. They know that nobody can predict when a big market move will happen and it is good to be in the market rather than scramble together money and routes to get to the market when the move happens. They know that investing in equity is not an art nor is it a science for retail investors. It is actually a routine and, therefore, boring activity that uses the stock market for long-term wealth creation. Here are four investor types and how financial advisers deal with them.

The ‘sab-chor-hain-ji’ investor: This person is suspicious of anything that is not government-owned, be it a bank, an insurance company or an investment. He points to the private sector as the source of all evil, profiteering and cheating. He stays away from equity in general and mutual funds in particular simply because he thinks they will run away with his money. Of course, this deep love for the government disappears when he wears his other hat—that of a dissatisfied citizen. Suddenly then, the government becomes the root of all corruption, evil and dysfunction. His lack of a first principles approach keeps his money in a savings deposit, in 30-40 useless endowments plans and then, periodically, he implodes his savings money in a Ponzi scheme. Financial advisers usually stay far away from such people.

The too-clever-for-my-own-good investor: This person knows it all. Reads all the news, is active on WhatsApp vitriol and watches the TV channels for more. He thinks he is a Wall Street swinger and knows the markets, the shenanigans and the back stories better than any money manager will know. He is dismissive of help and really will do it all on his own. His money usually sits in expensive PMS funds managed by even sharper shooters who manage to out-talk, out-jargon and out-alpha male him. Look closely and you will find the huge saving bank balances, the endowment plans, some disputed or half-finished properties and a PMS that is costing more than he knows.

The missed-it-again investor: He is half convinced that he needs to be in equity but is still riddled with doubt about how to go about it. He understands that mutual funds are a retail investor’s vehicle but does not have the time or the appetite to learn more. He hangs around waiting for the right moment. Listens to poor advice on how far the market will fall and waits with his money for that golden moment to invest. And then this big market move happens and he confesses—missed it, bro. Now it is too late. Financial advisers like to work with this kind of an investor who is open to investing but just not had the right advice or path to steady investing.

The all-is-well investor: Regular readers of this column and Mint’s personal finance pages will hopefully be quite zen at the moment. The up and downs of the markets mean little if you are working according to a plan, have an asset allocation that suits your profile and goals and have been rebalancing your portfolios when markets run up or down. This is the investor type that is already working with a planner or is a DIY investor who has taught himself the basics of investing.

The lesson from this big market move is simply this: markets go up and down. But you need to have a plan with defined goals to take advantage of such market moves. No, it is not too late. It was not too late when the Sensex was at 12,000, or at 20,000 or at 30,000. It is not too late now. But please learn to swim before you dive into the deep end.

Monika Halan is consulting editor at Mint and writes on household finance, policy and regulation

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