Why do long term investors get nervous when markets have corrected? Why do they not be more “bullish” when markets have corrected? Why am I questioning this?

Okay, let’s compare markets correcting as an End of Season Sale at your nearby mall. The only difference between these two is that when there is an End of Season sale in malls to buy “consumption” items there are long queues to buy; but when there is an End of Season Sale in markets, there are more people that are apprehensive to buy “assets”. This seems like a sweet spot when it comes to making money, I’ll explain:

“So to break the above observation further, what it means is that, the larger section of population/investors has a mentality in which they would be “bullish” while buying discounted consumption items which have no shelf life and will be of zero value in future, but be “bearish” when assets that are available at discounts which have a shelf life and be valued more in future, this seems irrational to a person who believes in making money and would ideally take advantage of this situation. However, there are very few who capitalise this situation.

Of course, this doesn’t mean that you have to remain perpetually invested, other than the reason of selling a stock when it is fully valued, don’t sell your shares unless either of the following situations arise: 1) When a need arises (kids education, buying a house, medical emergency); 2) For getting what you had dreamt of (guilty desires) irrespective of the price.”

This is a well known fact, retail investors are the ones who lose the most amount of money during a crash because they are the last ones to enter the party and by that time the “tasty food” is over and they are forced to have the “leftovers”.

How in stock market circles, they say “Upar ki Malai khatam ho gayi hai”.

So, to take advantage of this, you have to stay ahead of the curve, you have to be a contrarian.