
Your behaviour, not markets, drives returns
“Ordinary folks with no financial education can be wealthy if they have a handful of behavioral skills that have nothing to do with formal measures of intelligence,” wrote Morgan Housel in his book The Psychology of Money. He says a “genius who loses control of their emotions can be a financial disaster.”In other words, behavioural biases commonly affect how people make decisions, and they can have a significant impact on investment outcomes.“After having followed the markets for a considerable number of years, the one thing I can say with some certainty is that markets are driven not just by data and fundamentals—they are driven by human behavior,” says Krishan Rao, MD & co-head - Equity Broking Group, JM Financial Services.
Most of the damage investors inflict on their portfolios stems from how they respond to market uncertainties.Investing is thus less about IQ and more about discipline. Even the smartest person can lose it all if they panic, while steady, calm investors build wealth by simply staying the course.For Vinita Kullai, 28, a communications professional in Dubai, mutual funds form the core of her portfolio, running consistently through SIPs, while she remains cautious and diversified in higher-risk assets like crypto.
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