Diary of a first time investor


‘Be fearful when others are greedy and be greedy when others are fearful’

The mogul of investing, Warren Buffet has made most of his money in the stock markets during the times when everyone is running away from it. As a first time investor, especially in the current scenario, you and I are fighting a war between fear and opportunity. Is it FOMO on the stock market action or is it JOMO because of the market uncertainty while the world is trying to win the fight against COVID-19.

Well, let me take you through my personal experience. I am in my early-mid 20’s and I started investing for the first time during this unprecedented time. Having graduated from the university in 2017 and with my two and a half years of work experience, I did save up a little for the sole purpose of investing. Call me an opportunist, but I waited through the last few years for a slight correction in the Indian Stock Market. The stocks were highly overvalued and I could either invest while they were at a high and jump on the ride or wait for a crash to get more value on my coin. I chose the latter. Before I delve further into my experience, I wish to highlight my investment timeline was five years and further.

Another reason I waited for a while before I put my buck on the market was because of the advice my father and many other individuals gave me – ‘Only invest the money you are ready to lose.’ So it took me a while to save up a sum I could afford to lose. If my investments went downhill, well too bad, no more Starbucks coffees or new clothes for the year.

However, in the beginning of 2020, I knew I was ready to start my journey as an investor. Through the months of COVID-19, with countries around the world announcing lockdowns, the stock markets kept crashing all over. I took a step back, concentrated on work, and did not open any financial websites for an entire week. Once the markets started to settle down a bit, I realised that the stocks I wished to buy were finally trading at a fair value.

Given the conditions, I was checking on two quite versatile boxes:

√   First time investor

√   Investing during a pandemic AND a downturn

That’s quite an interesting combination to go by. But I stuck to my guns and stopped paying attention to the anxious background noise in my head.
So I am sure you are wondering if it was a good call or not? And should you be a first-time investor or even just a returning investor when the markets are facing a hard time? The answer is a resounding YES![/vc_column_text]

If you have the cash to spare, always invest during a downturn in bits and pieces. There will be times when the stock price will further dip than your buy price, but stick through it. Eventually, you’re in it for the long haul and as history has proved, the markets will always recover.

This by no means is advice to try and time the market. Timing the market is speculating, something which we need to refrain from. But if you get the opportunity to invest during unprecedented times, do not hesitate. It may seem daunting at first but the returns are worthwhile. And as a young investor, there are plenty of years to recoup the losses if the investments do get swamped.

Highlights to keep in mind when being a first-time investor during a downturn:


Invest only after you’ve covered your expenses

You should invest your money in the market after you’ve expensed for your lifestyle, emergencies, and healthcare. Investing at times can be very uncertain and your portfolio will see ups and downs. Don’t expect to cover for rent, healthcare, and any unexpected expenses from
the money you’ve invested.

Diversify! Diversify! Diversify!

Diversify not only in equity stocks via Mutual Funds, SIP, or ETFs, but also diversify in asset classes. If you are open to taking on some additional risk, (I know, what can be riskier than already investing during this time, but hear me out) look into investing in cryptocurrencies, real estate, gold ETFs. Put your eggs into two or more baskets.

Do not track your prices every day

When you are on a weight gain/loss journey, is it healthy to track your weight every day? Of course not! It’s a slow process. So are your investments. Give it time to nurture. Once you’ve invested, look at your portfolio once a month, just in case you wish to rebalance it or for updates. Do not wake up every morning and log into your account to see if you’ve become rich overnight.

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