A coward’s portfolio
Fear trickles down to the financial world here, leaving investors to balance on a tight-rope in a fluctuating market.
Investing with perseverance is not easy, and very few people think otherwise. As seen during the so-called ‘crash’ of the stock market on January 15, investors are the personification of cowardice in the truest sense of the word.
As the manufactured revolution of the imported cleric continued, investors kept their eyes on television sets instead of the price chart to see where the money trend went. The news of the arrest order against the premier dropped like a bomb and investors panicked, scrambling to protect their most prized possession – money.
One other trait found in the majority is that they’re incapable of analysing things quickly and build their decisions on what others (analysts) are saying or doing.
In the great words of Gordon Gekko, a fictional character of the 1987 film Wall Street,
“Greed is good”
But when it comes to bite you back, the best way to tackle it is to stick to your stance. Investment decisions are predominantly based on fundamentals and financial analysis. Day traders do the exact opposite, swaying like trees in a storm which eventually ends up in a disaster.
Jinnah once said,
“I do not believe in making the right decisions. I make a decision and make it right.”
Historically speaking, the stock market rewards those who stay committed to the game for the long haul. Short-term investors or day traders, who are the majority, are looking for quick bucks and when they feel threatened, they start selling.
In economics, one person’s loss is another person’s profit, therefore as panicked investors were busy fuelling the selling frenzy, long-term (sensible) players were having a field day, buying at a bargain.
But the country’s cowardly investors are not the ones to blame. Fear is embedded in our society, or in any society for that matter. In Pakistan, the only thing certain is death, forget taxes. This breeds the mentality of ‘everyone for himself’, but perhaps this is the way we have been brought up.
In the 66 years since the country’s inception, Pakistan has never been stable and neither have we developed a social system. Seems like the crash we witnessed on January 15, not just in the market but across the country, is who we really are.
But, the night is darkest just before the dawn; it is only uphill from here.