Newbie Investors Get A Dose Of Reality

The mini-bear market has been an eye-opener for first-time investors. But is everyone learning the right lessons?

- Sashind Ningthoukhongjam & Abhishek Mukherjee

Delhi-based 37-year-old insurance sector executive Prateek Verma says the biggest change his wife has noticed in him over the past few months is that he has become "weirdly philosophical".

Can this be attributed to the joys of matrimony?

"No, it is the stock market," he quipped.

While benchmark indices have clawed back some lost ground after a prolonged spell of weakness, Verma's portfolio is still sporting an enchanting shade of crimson.

Has Lady Luck singled him out for special consideration? Or did bad decision-making also play a part?

Verma, who started his investing journey soon after the covid-19 pandemic, initially stuck to the large-cap universe, but could not help cast flirtatious eyes at the juicy profits people were making in small- and mid-caps. This led to a series of shoddy choices.

For instance, he had bought shares of a leading automobile manufacturer but decided to hit the sell button. "Most of the narrative was around the company's upcoming electric vehicle (EV) models. So, I thought why not sell this legacy company and buy shares of a pure-play EV firm?"

He offloaded his auto shares to buy stocks of a much-hyped EV startup. However, the large-cap auto company's shares continued their upward trajectory, while the EV stock is currently trading with a soul-crushing loss of 40%.

Similarly, Verma bought a bunch of defence stocks last year, aiming to benefit from "the global geopolitical situation", but only ended up bombing his portfolio, as all of his purchases are down 30-50%.

"Earlier, almost any stock I bought continued to rise. Nowadays, it is just the opposite. Sometimes I wonder whether direct stock investing is meant for me at all," he added.