What Smart Investors Do Differently
You’ve set your SIPs, checked the returns last week, and now—your friend just posted a 35% gain on a crypto fund you’ve never heard of.
You feel… FOMO.
So you pause your SIP and jump ship.
It happens every day. But do you know who just beat you at the investing game?
Your own mind.
🧠 TL;DR (Fast Summary)
Most investors don’t fail because of bad markets.
They fail because they panic, switch, chase, or freeze at the wrong time.
Parag Parikh called it: Behavioral traps ruin long-term returns.
Learn the 3 common traps—and how to escape them.
📖 3 Behavioral Traps That Kill Indian Investors
1. Herd Mentality
“Sab le rahe hain, toh sahi hi hoga!”
This is why people pour into IPOs or hot sectors without understanding them.
🪤 Result: You enter late, exit too late. The gains go to early movers.
2. Recency Bias
“Last year’s top fund is this year’s top fund, right?”
Wrong. Markets rotate. Sectors that shine today may sink tomorrow.
🪤 Result: You shift from equity to gold to international funds without a plan.
3. Overconfidence Bias
“Main toh 2x kar chuka hoon! I know this game.”
The market has a way of humbling those who think they’ve figured it out.
🪤 Result: You increase risk, overtrade, or stop SIPs thinking you’ve found something better.
👩🏫 Meet Anand – The Confused Smart Investor
Anand was a software engineer in Pune.
In 2018, he started 3 SIPs in balanced funds and stayed consistent for 2 years.
Then, Bitcoin spiked. Friends made “quick lakhs.”
He paused his SIP, put ₹1.5 lakh into crypto.
Then came the 2022 crash.
SIPs would have doubled. His crypto investment halved.
Now? He’s back on SIPs, but behind by 2 years of compounding.
“My biggest mistake wasn’t Bitcoin. It was thinking I was smarter than the system.”
🧩 Takeaways for Every Indian Investor
✅ Stick to your plan—even when the noise is loud.
✅ Read more about behavioral finance than hot stock tips.
✅ Automate SIPs, limit screen time.
✅ Take advice from people who’ve seen multiple cycles—not viral influencers.
🗣️ What You Can Do Today
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Open your investing app and list 3 times you switched funds or paused SIPs.
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Ask yourself: Was it due to research—or emotion?
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Recommit to your original plan. Or update it with help from a professional.
💬 Tell Us in Comments
Have you fallen for any of these traps? What did it cost you—or teach you?
References
📚 Recommended Reading: Why SIPs Beat Market Timing
🔗 Why Timing the Market Doesn’t Work, But SIPs Do – Aditya Birla Capital Blog
This article explains why even expert investors struggle to time market highs and lows. It presents a compelling argument for the consistency and discipline that SIPs provide, especially for retail investors who lack the time or tools for active market tracking.
🔗 Should You Time Your Equity Mutual Fund SIP? Here’s What Experts Say – Economic Times
Leading financial advisors weigh in on whether it makes sense to pause or time your SIPs based on market trends. The consensus? Regular SIPs win over time due to rupee cost averaging and compounding—even when markets are volatile.
🔗 Market Timing vs. SIP – Value Research
Value Research offers a data-backed comparison of two hypothetical investors: one who perfectly times the market, and one who sticks to SIPs. The outcome shows that consistency beats prediction, especially over longer investment horizons.