The 5 Habits Of Seasoned Investors That Help Them Build Long-Term Wealth In Uncertain Markets

By Harsh Gahlaut

Seasoned investors aren’t born, they are shaped by experience. They have spent time in the financial markets and have developed the discipline and clarity to make sound investment decisions, particularly during uncertain or volatile periods. They don’t get swayed by short-term noise. Instead, they stick to their plan and allow time and discipline to do the heavy lifting.

Take two investors of the same age who have been investing for years. Mr Hype is returns-driven. He chases trends, tries to time the market and exits at the slightest sign of profit, only to repeat the cycle. Mr Steady, on the other hand, is goal-driven and disciplined. He invests consistently, stays the course and focuses on the long term.

Over time, Mr Steady benefits from the power of compounding and builds a substantial corpus, while Mr Hype realises that short term or ad-hoc investing is a zero sum game and does not create meaningful wealth.

As the saying goes, “the wise learn from their own mistakes, but the wiser learn from others.” Understanding how seasoned investors respond can offer valuable investing lessons to all of us.

They Stay Invested

The NIFTY 50 index has delivered a CAGR of close to 16 per cent over the past two decades. An investor who started a SIP of Rs 10,000 in 2004, with a modest 5 per cent annual step-up, would have built a corpus of Rs 2.3 crore by now.

But here’s the catch: studies show that less than 2 per cent of investors actually stayed invested throughout that 20 year period, so while the market gave enough opportunity to investors to create wealth, the actual wealth was created for less than 2 per cent investors and this is what we term as the ‘Returns Gap’ which is the difference between the return that the market has given vs what investors have earned.

Seasoned investors understand that SIPs are built for volatility. They know that market corrections are not signals to stop but opportunities to accumulate more units at lower prices. By staying the course, they position themselves for long-term gains, while others give in to panic.

They See Volatility as an Opportunity

Market corrections often trigger fear, but seasoned investors view them as windows of opportunity. They know that risk is an essential part of wealth creation.

Instead of being overly conservative in their early investing years and aggressive closer to their goals which is a common mistake, they strike the right balance early on. When markets dip, they don’t panic. In fact, some even accelerate their SIPs if their cash flows allow, leveraging volatility to their advantage.

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They Tune Out the Noise and Focus on Goals

What keeps seasoned investors steady is their clarity on “why” they are investing. Whether it is retirement, child’s education or financial freedom, they stay focused on the long-term objective.

Market headlines and short-term fluctuations don’t distract them because they know their goals are years or even decades away.

They Don’t Chase Returns, They Follow Purpose

Chasing returns leads to reactive, emotion driven decisions. One month its small caps, the next its gold or global funds. This scattergun approach may feel exciting but rarely builds wealth.

Seasoned investors focus on purpose, not performance. They respond to their financial needs with planning and discipline, not to market noise with impulsive choices. 

When you chase returns, you react emotionally. When you invest for your goals, you respond with clarity and conviction. 

Portfolio performance and returns become an outcome of this approach.

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Long-Term Investing and the Power of Compounding

Conviction in the long term prospect of investing is the backbone of a seasoned investor's success. They understand how compounding can play a huge role towards long term wealth creation. A powerful example is that, at 12 per cent compounded return your investment can grow almost 10 times in the matter of 20 years. 

The key is to remain patient and avoid short-term distractions or withdrawal of your investments.

They Trust the Process

Seasoned investors build resilience through trusting the process that revolves around expertise, personalisation, understanding the relationship between volatility, risk and reward and finally by focusing on goals rather than returns. 

By trusting the process and allowing it to work uninterrupted, through highs and lows, investors give themselves the best shot at building long-term wealth.

Volatility is the true test of an investor’s resolve. Seasoned investors do not panic at the first sign of volatility. They don’t stop their SIPs when things get rough. They believe in the plan to achieve long term goals. Because they know that in the long run, consistency and discipline would build meaningful wealth for them.In uncertain markets, be like Mr Steady, seasoned, disciplined and wise.

(The author is Co-Founder & CEO of FinEdge)

[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt Ltd.]

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