Embracing Market Fluctuations
2025 was a rollercoaster for Indian markets. After two years of soaring highs, the markets finally hit a rough patch. Tariffs, geopolitical tensions, and mounting uncertainty sent stocks sliding.
Falling markets are gut-wrenching. Portfolios shrinks, optimism fades, and regret creeps in. As stocks go down 50-60%, the same questions resurface: Why didn't I sell at the top? Should I now sell losing positions and move to cash? Should I instead buy stocks at these low prices? Or should I simply do nothing and wait for the storm to pass?
Most of us will be investing for decades, perhaps a lifetime. Along the way, there are bound to be numerous bull markets and corrections. Yet it's surprising how little time we spend preparing for these future ups and downs. Instead, we react with shock every time the market turns, as if volatility were unexpected.
The feeling of being on a rollercoaster is perpetual: every twist seems critical, every event feels game-changing. But zoom out (in normal times), and you realize that these fluctuations are a feature, not a bug.
This idea is explored in detail in the investor guide Reconciling with Market Fluctuations, a compilation of posts we published in 2024. We offer long-term investors a mental model to navigate market declines with greater clarity and calm. While falling prices will always sting, it's possible to prepare for and manage the inevitable fluctuations slightly more effectively.
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