Same crash . one investor flinched . one did not
The urge to do something cost 3000 units.
Rs 1000000 in one fund. NAV 100. 10000 units. The market drops 30 percent to NAV 70. Both investors stare at the same red screen.
Sat still
Held every unit through the fall. Did the hardest thing, which was nothing.
10000
units . untouched
Did something
Sold at 70. Re-entered at 100, the day it finally felt safe again.
7000
units . all he could buy back
3000
units the round trip destroyed. Sold 10000 at the bottom. Bought 7000 back.
43%
higher he re-entered than he sold. NAV 70 out, NAV 100 in. Fear sells low, comfort buys high.
Rs 3.6L
behind on the same money. The crash did not do this. The reaction did.