Israel-Palestine Conflict, Stock Market, and Your Investment -

From today, news about the Israel-Palestine conflict is making headlines, and naturally, concerns are brewing in the minds of investors. What will happen next?

Occasionally, due to market downturns, many people fear for their investments. Does it make sense to continue your long-term investments during such times? This is when many people question what "long-term" actually means. Consequently, some people withdraw their money based solely on hearsay and watch the market closely. Many of them wait for deep corrections. 

A famous quote by Pyter Lynch says, "Far more money has been lost by investors in preparing for corrections, or anticipating corrections than has been lost in the corrections themselves".

But let's revisit the original issue. Do long-term investments in the stock market always yield consistent returns? The stock market relies on various factors that are entirely beyond our control. These include interest rates, imports and exports, economic growth, the exchange rate between the rupee and the dollar, inflation, international political situations, and government policies, among others. While all these factors are not within our control, they still have a significant impact on the stock market and consequently your investments.

Mathematics and economics are both subjects that many find challenging. Nevertheless, everyone attempts to decipher the mathematics of economics through their economic investments. Investment mathematics is fundamentally intertwined with economics.

The country in which you invest in the stock market is directly linked to its economy and its future growth. Short-term fluctuations in the economy, such as interest rates, can have a substantial impact, but their effects are negligible in the long run. In 2008, Lehman Brothers declared bankruptcy, and the global economy was in turmoil. The Indian stock market also plummeted, losing nearly 60% of its value. Then, in 2015, Britain decided to exit the European Union (BREXIT), and India implemented a demonetization policy. Even during the COVID pandemic, the market saw a decline of more than 50%. While many may not remember these events, their immediate effects were felt in the stock market.

India has a growing economy, and rapid development is on the horizon. Just as you become a significant player on the global stage, global events have a more significant impact on you.

Whether it's the stock market or the economy, neither is a straightforward matter. Uncertainty and unpredictability are currently prevalent in the global economy. Over the past two years, conflicts like Russia-Ukraine and India-China border skirmishes, along with the ongoing Israel-Palestine conflict, have created tension in the global economy, global trade, and international relations. The adverse consequences of these events will undoubtedly impact the stock market.

During such times, it is imperative to adopt a long-term perspective and occasionally endure crises that may arise to secure your investments.

Investors must keep in mind that their investment in the stock market passes through three phases.

1) Good Returns 2) No Returns and 3) Low Returns. 

However, the question is when any of these situations will occur, which is uncertain. And this is known as market risk.

Considering all the above reasons, the credit for how your investments turn out, based on your investment goals, goes to continuing your investments until your objectives are met.