Investing Is a Game of Survival
For decades, fund managers, market veterans, and investment firms have preached the same feel-good narrative:
“Stay invested forever.”
“You are buying companies, not stocks.”
These statements are comforting. They make investors feel like they don’t need to worry about market crashes, drawdowns, or valuations. But history proves that these beliefs have led to some of the biggest wealth destructions in investing.
At INVasset, we don’t sell illusions. We don’t ask investors to believe in market fairy tales. We believe in reality-based investing—one that acknowledges market cycles, valuations, and the most ignored factor in investing: human psychology.
Let’s be clear: we are not predicting a bear market, nor are we against any particular investment philosophy. Every strategy has its place in the market, and every investor’s approach is shaped by their risk tolerance and objectives. However, the narrative fed to retail investors—that they must invest for the long term, buy companies and not stocks, and never sell—is flawed.
Yes, we buy companies. But we buy them through stocks. And stocks have prices, valuations, and cycles. Ignoring this reality can be costly.
The Behavioral Trap: How Investors Fall for the Myth of “Stay Invested Forever”
Investors love certainty. The idea that you can just stay invested and everything will be fine feeds into human psychology:
Fear of Missing Out (FOMO): Makes investors stay invested in overvalued markets.
Loss Aversion: Makes them hold onto crashing stocks, hoping they will recover.
Overconfidence Bias: Makes them believe their investments will always come back.
Most investors never ask the most important question: What happens when the bear market comes?
When Markets Crash, the Truth is Revealed
The market doesn’t care about narratives. When bear markets strike, portfolios can lose years of gains in months.
Historical Examples:
2008 Financial Crisis: The NIFTY fell 65%, and the biggest PMS funds that claimed to be “safe” collapsed 70-80%.
2000 Dot-Com Crash: Even fundamentally strong companies fell 50-80% as valuations corrected.
1993 Harshad Mehta Scam: Portfolios saw 50%+ drawdowns, wiping out retail investors.
2018-2020 Market Slowdown: A milder bear market where quality and growth stocks didn’t fall significantly. But in previous cycles, even quality stocks collapsed.
Yet, in every cycle, new BAAP (Buy at Any Price) stocks emerge—stocks pushed as invincible due to their growth and market positioning. In 2021, stocks like Asian Paints, HDFC Twins, and Bajaj Twins were marketed as untouchable winners. Post-2021? No performance.
The Beta Myth: Why Risk Isn’t Just a Number
Many fund managers justify their approach using complicated metrics:
“Our beta is less than one.”
“Our Sharpe ratio is strong.”
“This risk-adjusted metric shows superior downside protection.”
But the truth is, risk management is not about beta or ratios—it’s about recognizing market cycles and acting accordingly.
Many of the best-performing portfolios in recent years are now down more than 25%, even as the BSE 500 itself is down only 10% since December. The same managers who once claimed their beta was low are now witnessing severe drawdowns. Kahan gaya beta, beta?
Why? Because if your beta is high on the upside, it will also be high on the downside.
The Hard Truth: If Your Portfolio Goes Up 5x in 7 Years and Then Falls 50%, You Are Back to Square One
Let’s do the math:
If your ₹10 lakh portfolio grows 5x in a bull market (₹50 lakh), that’s great.
But if it crashes 50% in a bear market, you are back to ₹25 lakh—which is just a 2.5x return over 7 years.
At the market peak, the CAGR would have been 38%, but after the bear run, it drops to 14%.
This is why knowing how to get out is more important than knowing when to get in.
And yet, most fund managers never warn investors about expensive markets.
The 2000 Dot-Com Bubble: The Greatest Example of How ‘Stay Invested Forever’ Fails
During the dot-com bubble, investors were told:
“The internet is the future.”
“These companies will change the world.”
“Stay invested. You are buying great companies, not stocks.”
And then reality struck:
Amazon fell 93% from its peak.
Cisco lost 85% and never reclaimed its 2000 peak for 22 years.
Microsoft, Intel, and Qualcomm crashed by 70%+.
Investors who stayed invested lost almost everything. Even today, some companies never recovered.
Why Fund Managers Don’t Tell You to Exit
Fund managers and PMS/AIF firms have one primary goal: increasing AUM (Assets Under Management).
More AUM = More fees.
More fees = More incentives to keep investors in the market.
This is why even in expensive, overvalued markets, you will rarely hear a fund manager say:
“The market is too expensive. You should take some money off the table.”
Instead, they say:
“Stay invested. Think long-term. Market timing doesn’t work.”
Why? Because if investors pull out money, fund managers lose their AUM, their fees, and their business.
How INVasset Protects Investors from These Pitfalls
At INVasset, we focus on three key pillars:
- Valuation-Driven Investing
We don’t blindly buy stocks—we buy opportunities at the right price.
We exit when valuations become irrational.
- Risk Management & Tactical Hedging
We don’t believe in “staying invested forever.”
We reduce exposure when markets become frothy.
We hedge against bear markets to protect capital.
- Psychology-Based Investing
We analyze market psychology to avoid FOMO-driven mistakes.
We focus on exit strategies, not just entry points.
Acknowledging Mistakes to Find Better Solutions
At INVasset, we understand that no investor or fund manager is perfect. Mistakes happen, but the key is to acknowledge them—not hide from them. Our focus remains on learning, adapting, and building strategies that stand the test of time.
Takeaway: Markets will crash again. If your portfolio isn’t prepared for that, you’re playing a losing game.
At INVasset, we don’t tell investors what they want to hear. We tell them what they need to hear.
Because in investing, what you keep matters more than what you make.
