Being Fearless is the Way to Go

Being Fearless is the Way to Go

Felix Baumgartner was sixteen when he jumped off a building for the first time. That’s when he realized it was what he really wanted to do. Jumping off the bridges, parachutes, mountains, and pillars. But he had no idea what his future had in store for him. Never he had imagined that his luck would take him 39 km above East Mexico and make him jump at a speed that would exceed the speed of sound.

 

To make it happen, an 87-page proposal was presented to RedBull in 2007. Post its acceptance, for the next 5 years, RedBull trained him for the death-defying jump. A jump that was going to break the sound barrier at a speed of 1300 km/h.

 

The doomsday arrived. On 14th October 2012, in a full-pressurized suit, he was packed in a capsule. With the help of a Helium balloon, he was ascended to an altitude of 128K feet. It’s 99K feet higher than the top of Mount Everest.

 

At the top of the World, when he finally opened the door of his capsule, he was fearless to jump into the low atmospheric zone. Standing under a pale blue-black sky, he was fearless to shatter all the records that have been registered in the history of space jumps. He was at a point where he could measure the entire width of New Mexico between his thumb and index finger. And yet he was fearless to dive in the outer space and descend to Earth at supersonic speed.

 

 “I am going home now”, said Felix and jumped from his capsule.

 

Felix Baumgartner

Image: Fearless Felix Baumgartner Just Before His Supersonic Jump | Source: Youtube

 

It took him just 10 minutes to break the 8 World Records and the sound barrier altogether. By the time he landed on Earth, his fearlessness had made him the 1st skydiver to move faster than the speed of sound. 

 

When asked how did he feel at the top, he replied:

When I drink Red Bull, I go supersonic. I am fearless. I am an Übermensch.

 

Undeniably, we get richly rewarded once we fight our demons. Fear is one of them.

 

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Let me talk about its relevance in the field of investing. A human brain is not wired to respond positively to a financial loss. Be it losing real money or witnessing paper loss due to downtrends in the financial market. We just can’t digest it. As per the research, our pain of loss exceeds our excitement of gain. Over time, it turns into fear and affects our logical way of thinking. As a consequence, this fear makes us miss many golden opportunities that would reward us considerably well in the long-term. Under its blindfold, we just fail to spot such lucrative possibilities.

 

For instance, a crash of 29% induced fear among the stock investors between 1oth May – 14th June 2006. This resulted in panic selling and paper losses were converted into real ones. Investors were scared to death. Stocks are fearful, isn’t it?

 

downfall in the market

Image: A Crash of -29% | Source: Moneycontrol

 

On another different occasion, equity investors lost their control after witnessing a crash of 57%. A huge portion of their wealth was eroded within a few days. Not only they lost their pants. They even pledged never to invest in the stocks again. Stocks are scary, isn’t it? 

 

Recession

Image: A Crash of -57% | Source: Moneycontrol

 

Let me show you the other side of the coin. You’ll be surprised to know that both the crashes belong to the same chart. Yes. And that too SENSEX. These downtrends scared the investors for a short period of time and then blew away like smoke. But people reacted overly. Their fear cost them dearly. Without giving a second thought to the long-term prospects of our country, they shed off their quality holdings. Instead of buying what was available cheap, they sold their valuable bets cheap. 

 

On the contrary, there were a few fearless ones who infused their capital during such troubled times. Post-apocalypse, V-shaped recovery in the market happened. The huge tailwinds stepped it. The index touched new peaks. Their capital grew in tandem with a rise in the market. 

 

Crashes are the part of long journey

Image: Crashes Appear to be Small Dips in Long Term | Source: Moneycontrol

 

The point is: Without getting fearful if we enclose our mentality around long-term perspective, these crashes will appear to be just small dips (circled in the chart above). Without getting fearful, we can leverage thousands of opportunities to invest that emerge after such instances. Without getting fearful, we can continue investing in the equity markets through SIPs, build our wealth, and plan our future really well.

 

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At RichifyMeClub, I have been consistently writing about investing in terms of decades. Not months. Not even a few years. The reason I emphasize this is: when you look in terms of decades, you’ll observe that Indian financial market tends to stay in a positive trend most of the time.

 

For instance:

During 2000-2009, it gave positive returns on 7 different episodes.

During the period 2010-2018, it stayed positive 7 times. 

Almost 75% of the time, the market gave fruitful returns. And it’s only about being fearless 25% of the time. 

 

SENSEX Returns

Image: History Proves that Market Stays Positive 75% of the Time | Data Source: Moneycontrol

 

Since ages, the financial market has always been volatile like this. And it’s never going to change. Where will it head in the near future? And when is it going to happen? No one knows. The history of volatility shows that the market recovers really well after a downside.

 

The only thing I can assure you of is that India as an economy has bright prospects going forward. Invest in its future. Ride these ups-and-downs and stick with a long-term game. After all, during troubled times, the fortunes get transferred from the fearful to fearless ones.

 

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Related Post: A Courage Is What You Need

Cover Image Source: Adweek

 

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4 Comments

  • myfatfire.com

    January 15, 2019

    Temperament is more important than investment ideas.

    Reply
  • A K SINGH

    January 21, 2019

    Really,nice article to encourage investment.

    Reply
  • ravi kumar

    February 3, 2019

    nicely explained ,truly educative sir

    Reply

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