There are old clichés about learning from mistakes.
We are always told that mistakes make excellent teachers. All this may be irritating but it's also true, at least in financial matters. For the last few years, we've all gotten used to a situation where it felt as if that mistakes didn't matter. All types of investments were doing well, all kind of assets were rising in value and most people’s real (non-investment) earnings were rising rapidly too.
Unfortunately, those times are gone now and its time to focus on correcting mistakes. It's often said that to save wisely and invest well, one doesn't really have to do any big thing right.
There’s a deep mistake that has driven investor behaviour on the stock markets. And this nothing but the same old bogey, short-termism. On the surface, this seems like sensible behaviour. The markets have turned negative, so people have pulled out.
In reality, it is anything but that. What we were doing a year ago was also short-termism, and what we are doing now is also short-termism. It is true that business prospects around the world appear to be bleak.
However, it is also true that stocks already have a fair bit of bleakness priced into them. Sooner or later, things will turn around.
The whole point is to have a long-term view so that you can buy when everything is down in the dumps and available dirt cheap.
I'm not saying that its time to rush back in, but continuing with regularly investing, whether its through a systematic investment plan (SIP) or otherwise is the right approach. Those who have stopped investing in this mania are not doing the right thing.
If this is not the time to start doing that, then it will never be.