Your Guide to Market Patience

The markets had a rough ride on the 8th of August, especially in the last hour and a half of trading, when a sudden and unexpected fall caused visible distress. This marks the sixth week in a row that the market has closed in the red—something that hasn’t happened in many years.

The sentiment right now is extremely weak, and the market seems oversold. There’s no clear positive news in sight, and hopes around any relief on the tariff front remain distant.

• The Nifty closed down 0.95%, and this trend of falling has been continuing since early July.

• Nifty Junior broke down by 1.24%, mid-caps lost 1.44%, and small caps declined by 1.26%. This shows broad weakness across the board.

• Nifty Bank also showed weakness with a bearish engulfing pattern and a 0.93% decline.

• On the other hand, gold is hitting all-time highs in INR terms, now at ₹10,157 per gram. This once again proves how gold protects portfolios during times of distress, something we've seen happen many times since 1991.

Other Market Triggers

• PG Electroplast, which was once a market favorite, crashed 20% after it cut its revenue and profit growth guidance. The stock had touched ₹1,000 before May and has now dropped to ₹588.

• Bharti Airtel also dropped 3.3% despite announcing good results, proving once again that good news doesn’t always support stock prices if expectations are already priced in.

What to watch next ?

• Key meetings and visits—including the US team arriving in India on the 25th, Putin's visit on the 27th, and our Prime Minister's trip to China at the end of August—might bring some clarity, but until then, the current 50% tariff stays in place.

• Technically, many charts that had been holding a key support level also gave way today, indicating a significant breakdown.

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What To Read This Week ?

Patience in the Market: A Long-Term View

Lately, There has been a growing sense of frustration and impatience among many investors. This is understandable, especially after a period where the market hasn't seemed to go anywhere.

We’ve experienced a significant lull in the last year, and it's easy to feel disheartened when your portfolio isn’t performing as you’d hoped.

However, it's crucial to put this into a broader historical context. These periods of stagnation aren't new; in fact, they're a normal and expected part of market cycles.

A Look at Global Market History

While the Indian markets have been relatively kind to us over the past 10-15 years, with few prolonged periods of stagnation, this isn’t the case everywhere. Globally, there have been decades where markets have remained flat. Take a look at the Japanese market, a classic example.

After a massive bull run for about 30 years, it entered a lull that has lasted over 30 years. Similarly, the Chinese market is another prime example. It first hit a new high in 1993, then stayed around that level until 2005.

It then made a new high in 2008, and despite its rapid growth and technological advancements, the market hasn't gone anywhere for 17 years. These examples aren't meant to cause worry, but to reset our expectations.

Adjusting Your Expectations

We've been incredibly fortunate in India, and this can lead to unrealistic expectations about how quickly we should see returns. The market simply can't go up forever. A bull run will inevitably be followed by a period of correction or consolidation. It’s like a marathon runner who has to pace themselves. They can’t sprint the entire race and neither can the market.

Therefore, it's essential to shift your focus from short-term gains to long-term growth. If you get short-term returns, that's a bonus. But if you don't, there’s no need to feel anxious or despondent.

Key Learning: The most critical lesson here is that market returns aren't a linear progression. We must manage our expectations and accept that periods of no growth are as much a part of the investing journey as the periods of high returns.