Deepak Shenoy’s thought provoking post on climbing the walls of worry:
The news is tiresome because it engulfs us in a sense of doom, while in reality we don’t see an impact. And the markets – they are now going up, both in India and the west. This sounds a little scary but often, when markets climb a wall of worry, you should sit up and give the market a little more credit for its moves.
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In the long run, things do work out, but what does change is how you plan ahead. For example, one change for now is: the Rupee’s at 95. If you were planning your child’s college fees at an assumption of 40 lakh per year (Rs. 80 to a USD, and $50,000 USD per year), you might need to revise that to 50 lakh per year. If you have 15 years left, your monthly SIP would have to rise from Rs. 61,000 to Rs. 77,000 per month with this new information. (Assumptions: effective rise of 6% per year from now, blended return at 11% on investing)
At least this one is actionable. To make up for this higher SIP – if you needed to – you will have to perhaps need to rework your goals, and perhaps delay retirement, or change your spending patterns. These are useful reactions to this crisis, better than endless doomscrolling of meme videos involving lego characters.
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The internet is designed to make you worry. Markets climb those walls often and surprise us on the upside. In life, one way to deal with worry is to climb those walls, not to let them be built around us. Enjoy the narrative, and stick with your game.