The similarities between Viral Fever & Equity Market corrections

The markets have recently been declining. Also falling are portfolio values. Investors frequently ask this question. Will markets bounce back? Is it time to sell now? What is the outcome?

Well, rather than answering this question directly, let us use the analogy of viral fever.

How do we get viral fever? Do we know it is coming?

We frequently get a viral fever. There is no set timetable. Most of the time, we are unsure if it will strike us. It could occur twice in two months or it could go years without happening. Our bodies occasionally give us warnings a few days in advance, but we are powerless to stop it and must accept the situation as it is.

(Equity markets are the same. It will fall, but we are unsure of when. When we least expect it, it hits.)

What happens when we get viral fever?

Our bodies hurt. The temperature is high. We lack the energy to go to work or complete predetermined tasks. We enjoy sleeping. Everything loses its appeal to us. We frequently believe we are suffering from terminal sickness. We’re scared because it appears like the end is coming soon.

similarly for equity markets. We believe that when it collapses, the world has come to an end and will never rise again. In the portfolio, we observe red. We experience depression and a lack of motivation. We dislike discussing increasing our investments or SIPs. Our life savings seem to be in jeopardy).

How long does a viral fever last?

Often for 3 to 4 days. For some, it lasts for 7 days. In a few situations, recovery takes a month.

(Equity markets are the same. Markets typically bounce back within a few weeks. Sometimes it requires several months. It takes a few years once or twice every ten years).

Viral fever: Is it fatal?

Largely no. Most people bounce back. In actuality, there are extremely few fatalities. It indicates that even when we feel like the end is near, we recover within a few days. Rarely, do some people pass away from viral fever. Most often individuals who did not get enough rest or who did not take other precautions while suffering from a viral fever.

(Equity markets are the same. Markets generally rebound. Sometimes there is greater harm and it takes longer. Chances are good that the portfolio will return to earlier peaks and even higher, barring a panic. Because they employ leverage, sell their investments at a loss, or make many trades to outperform the market, some investors never see their portfolios recover. Those who take a rest, give time to the market, and respect it, ultimately win).

What to do during viral fever?

It is not the right time to experiment with things. Take rest. Take vitamins and medicines as prescribed by the doctor. Make new resolutions about the future. Pray and commit yourself to a healthy lifestyle going forward.

(Same with equity markets. When markets fall, be watchful but do not do anything silly. Buy at lower prices. Increase your SIPs. Respect the market and commit yourself to being a more disciplined investor in the future).