A quick announcement before I begin today’s post – My new book, Boundless, is now available for ordering!
After a wonderful response during the pre-order phase, I finally have the book in my hands and am shipping it out quickly. If you’d like to get your copy, click here to order now. You can also claim a special discount if you order before 20th Feb. 2025.
Plus, I’m offering a special combo discount if you order Boundless along with my first book, The Sketchbook of Wisdom. Click here to order your set.
Let me start with a simple truth today, and it is that investing is not easy. Not because the math is complicated, but because it tests your mind (and keeps testing). It pushes your emotions to the limit and forces you to battle your instincts.
And so, today, I want to share with you 13 thoughts that I am thinking about in the current market fall. These thoughts have evolved over my experience of being an investor over the past 20+ years and seeing several such and even worse market downturns. And, to say the least, these have shaped the way I approach investing at all times.
If you’re just starting out as an investor, these reflections could be even more valuable. They may help you avoid the costly mistakes that many of us learn the hard way.
Let’s start.
Thought 1: Market is a Pendulum, Not a Straight Line
Markets don’t just go up in a straight line. They swing back and forth—between greed and fear. When prices are rising, it can feel like they’ll never come down. And when they crash, it can feel like they’ll never recover. But history shows us this isn’t true.
The market is like a pendulum that constantly overshoots in both directions. The pain you feel during a downturn is often the very thing that sets up the next upswing.
Understanding this is important because it helps you avoid making emotional decisions when the pendulum swings too far one way.
Ask yourself: Am I mentally prepared for both extremes? Or do I only feel comfortable when things are going my way?
Thought 2: Investors Chase Certainty in an Uncertain Game
Every time markets drop, people look for someone who can give them answers for questions like, “When will it recover? How bad will it get?” But the truth is, nobody knows.
Markets are uncertain, just like life. And seeking certainty often leads to panic-driven decisions. You sell because you’re scared, or you jump back in too quickly because you want to catch the rebound. Either way, you end up hurting yourself.
The real skill is learning to be okay with not knowing.
Ask yourself: Am I seeking comfort in false predictions or am I building the mental strength to handle the true uncertainty?
Thought 3: Falling Markets Don’t Just Destroy Wealth But Reveal Who You Are
It’s easy to call yourself a “long-term investor” when your portfolio is growing. But when it drops by, say 30%, and every headline screams of a further fall, your real self shows up.
Are you calm? Or are you panicking?
Down markets expose the gap between who we think we are and who we really are. They force you to confront your true tolerance for risk and your patience.
Ask yourself: Do I actually believe in my investments, or am I here to just enjoy the ride up?
Thought 4: Panic is More Infectious Than Any Virus
When you see others selling, it triggers something deep inside you. It’s called “fear,” and it’s biological. Our brains are wired for survival. If everyone is running from a bear, you run too. But in the market, this instinct can lead to disaster.
Panic spreads fast, and even rational people get caught up in it. Recognising this can help you pause and stick to your plan.
Ask yourself: Am I sticking to my long-term plan, or am I catching the emotional virus from others?
Thought 5: Wealth is Grown in Silence, But Lost in Noise
Building wealth happens quietly. You invest, then you hold, and then you wait.
But losing wealth? Well, that usually happens in noise (headlines, social media, etc.), that makes you react. Falling markets just amplify that noise.
You have to tune it out.
Ask yourself: Am I listening to the whispers of my plan or the shouts of the crowd?
Thought 6: Best Investors Are Masters of Their Minds
The greatest investors don’t win because they know more. They win because they control their emotions better than others. When markets crash, they stay calm. When others panic, they think rationally.
Investing is, after all, a mental game as much as a financial one.
Ask yourself: Am I training my mind to endure over time, or am I letting the market train me to react every now and then?
Thought 7: Temporary Losses Become Permanent When We Lose Faith
Your fallen stocks (assuming they are good businesses) will recover over time. “Over time” is the keyword here. And they will recover only if you still own them.
The market plays tricks on you. It makes temporary pain feel permanent. That’s when you sell. And that’s when losses become real.
Ask yourself: Do I believe in what I own, or am I holding things I don’t understand?
The Sketchbook of Wisdom: A Hand-Crafted Manual on the Pursuit of Wealth and Good Life.
This is a masterpiece.
– Morgan Housel, Author, The Psychology of Money
Thought 8: Our Timeframes Shape Our Reality
A market drop feels like the end of the world if you’re thinking in days, weeks, or even months. But stretch that view out to 10 or 20 years, and those crashes start to look like blips.
Time changes your perspective. It smooths out the bumps. That’s why having a long-term mindset is so powerful.
Ask yourself: Am I viewing my portfolio with a microscope or a telescope?
Thought 9: Most People Want the Rewards Without the Pain
Everyone loves the idea of making money in the market. But the truth is, there’s a price for those returns—and that is volatility. You have to endure the bad times to get the good ones.
Many people want the returns without the pain, but that’s not how investing works. Look at any great investor and they have battle scars. They’ve watched their portfolio get cut in half. But they stayed in the game. Because they knew suffering is the price you pay for long-term success.
Ask yourself: Am I willing to suffer now to thrive later, or will I sell and lock in my losses?
Thought No. 10: What You Survive Defines Your Future
A portfolio that survives a short or even an extended market fall is stronger than one built on luck or leverage.
Survival is everything.
If you can endure the worst, you give yourself a chance to thrive in the future.
Ask yourself: Am I building a portfolio to impress others, or one that will let me survive anything?
Thought 11: Cash is a Superpower
In tough times, cash is king. Not because it earns you some return when your stocks are losing, but because it gives you the freedom to act when others can’t.
When the market is falling and people are forced to sell, cash lets you buy quality assets at discount. It gives you breathing room and power when opportunities arise.
Ask yourself: Do I see cash as a “zero return” game, or as dry powder for future opportunities?
Thought 12: Real Wealth is Built in Downturns, Not in Upturns
When markets are rising, everyone looks smart. But real wealth is often built during the hardest times—when prices are low, fear is high, and you have the courage to buy quality assets.
These are the moments that separate good investors from the rest. Because when markets recover, those who bought during the panic are the ones who thrive.
Ask yourself: Am I positioning myself to take advantage, or am I running with the crowd?
Thought 13: Valuation Matters, But Psychology Dominates in the Short Term
We all love a bargain. When stocks get cheap, it’s tempting to think they’ll bounce back right away. But that’s not how it works.
Stocks can stay cheap—and even get cheaper—for a long time. Sentiment drives short-term moves more than valuation. So, knowing a stock is a good deal is one thing. But having the patience to hold it when it gets even cheaper is the real challenge.
Ask yourself: Do I have the temperament to hold what’s undervalued, even if it gets cheaper?
Bonus Thought 14: The Inner Game is Everything
In the end, the real challenge in investing isn’t just about picking the right stocks or timing the market perfectly—it’s about mastering your mindset.
Markets will always test you. There will be ups and downs, panic and euphoria. But what truly separates successful investors from the rest is how they manage their emotions and stay the course when things get tough.
Your mindset is your greatest asset.
If you found this post helpful, please share it with others who might benefit. It helps me reach more people and continue creating content to help you strengthen your inner game.
Also check out my podcast—The Inner Game—that I publish on YouTube. Here is the video version of the above post:
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