When the price of gold comes down - people buy more gold. When it goes up they do not sell. They expect it to go up in the long term. When it comes to equity/mutual funds - when sensex comes down - they stop investing. When it goes up they start investing.This is because they always think for the short term when it comes to equity.
If they follow the same strategy as the one that they follow for gold - they will make more money.
Yes, people buy more gold when it falls, but when it comes to Equities, they not only stop buying, in fact contemplate selling at a loss!!
WHAT AN IRONY!!!
When people buy Gold or for that matter, Real Estate, they buy with an intention of holding at least 5 years (that's the thumb rule), and in the interim, if the value of the Gold or Land, they are not at all bothered, and why should they, they have bought with the intention of investing for long term, isn't is?
Now, when it comes to equities, it stumps me as to why they suddenly lose their focus and conviction on the stock/fund, and try to get out of the same at the first opportunity.
They need to educated. Warren Buffet said, 'Buy a Stock, as if the Stock Markets are going to be closed for 5 years'. If we all follow the same approach, then I do not think investors will face grief and reap the benefits of High Yields from the Stock Market.
Think over it........
Best of luck,
Regards,
Srikanth
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