Lord Ganesha's lesson on navigating stock market cycles
Lord Ganesha’s annual arrival and departure during the festival marks the continuous cycle of birth, life, and death. Interestingly, the stock market also exhibits a continuous cycle of ups and downs.
When the devotees welcome the arrival of Lord Ganesha into their homes, it signifies the birth of life with hope and new beginnings.
The stock market faces similar phases when the bull market offers the investors the birth of opportunities with periods of prosperity and success.
Healthy economic growth, market stability, high employment, rising corporate profits, increased investments, and consumer spending are some of the key factors that lead to the upward trend in stock prices. Market participants are filled with happiness when they see their portfolio gains just like how devotees celebrate the festival with dance, music, and prayers.
Conversely, there comes a time to bid adieu to Lord Ganesha which represents the end of one cycle and the commencement of another.
In the world of the stock market too, the bullish phase ends eventually as it deals with excesses of leverage and over-optimism built during this phase. One must encounter the challenges and uncertainties of the bear market.
This stage signals the concept of death or declines within the market cycle.
Investors lose money and focus on re-evaluating their strategies and risk tolerance just like devotees focus on reflecting on their obstacles in life.
As devotees eagerly await and have faith that Lord Ganesha will return next year, investors too must have faith in the principle of mean reversion. It basically means that no condition can prevail for too long.
Greed will be replaced by fear. And fear will be replaced by greed. Periods of high margins will be
