How high net-worth individuals need to navigate market volatility
Live MintEmpirical data suggests that investors can be their own worst enemies when they change their investment plans in face of adverse market conditions. Gyrations in the market emotionally challenge investors to sell their champions in bad times driven by black swan events like the first covid outbreak and now the on-going geopolitical crisis. Another common mistake high net-worth individual investors make is increasing cash by substantial amounts during volatile stock market movements and reduce equity exposure due to perceived higher risk. Once again, diversification among stock portfolios increases during the bull -phase of markets where investor psychology drives them to invest in newer ideas that promise to give better returns than the champions they currently hold. Winners or champion stocks would be those companies that are established leaders in their business segments with increasing market share, have demonstrated consistent growth in the past, and are expected to grow at least 12-15% p.a.
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