Mind Over Markets by Zerodha Varsity: Fear of a sudden turn of events

2022 is a prime example of how fast the market sentiment can change from euphoria to despair.

:scroll: In this week’s issue:

  1. Confronting your fears when trading
  2. Buy a call or sell a put?
  3. Basics of physical settlement
  4. Why are debt fund NAVs falling


Check out all the previous issues of the Varsity newsletter, here :point_down:

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Market sentiment doesn’t change suddenly. It’s a gradual process which takes months if not years. Most investors and traders are ill-equipped to understand the direction of the markets due to lack of understanding in market dynamics and limited understanding of macroeconomic parameters.

The average retailer realises the market has changed direction only after there has already been a significant correction, and negative news flows start in the media.

By then, it’s already too late. Most of the profits are wiped off. A lot of so-called experts start advising newbie investors to hold for long term. This is when the true journey of an investor starts. The long drawn periods of sideways markets and bearishness. Very few people are capable of making the right decisions and therefore, very few people make money off the markets.