There is not enough literature or education of how to handle your portfolio during your withdrawing phase. This is obvious – there is no money to be made withdrawing from your portfolio. There is a lot of money to be made while you accumulate it, but NIL when you are withdrawing it. Fair enough, right.

Let us see what impact fear can have on your portfolio. For that YOU should know what impact FEAR has on an individual…..

a. Fear of loneliness can lead you to some terrible choices: many people choose to get married to avoid loneliness. Marriage, living together, etc. are many a times a compromise against living alone. Similarly if you do not know who to talk to about your portfolio, or being a lone ranger in a house of bank FD holders, as you age you may make TERRIBLE MISTAKES in your portfolio. Be vigilant.

b. If you need Rs. 4 crores for your retirement and you have Rs. 10 crores – fear may not hit you so hard. However if YOU think that the money is going to be tight, you might react in panic and do something stupid. For example if the index is at 18000, you may buy, but in panic sell it off at 12,000 when it falls – then find that the market has galloped to 21k – and you did not get a chance to enter. Fear.

c. Impact of fear can stay in your mind really long -even a childhood fear can impact your older age reaction to fear.

d. Fear of change can be difficult to handle: people who have been in debt for a very long period of time – say family time of 100 years do not realise the fear of change is worse than the change itself.

e. Exactly when you should be investing – at the end of a bear run, you may run out of patience. This is because of fear and not having the right counsel. Even if the counsel is right, sometimes fear can make people ignore wise counsel.

f. Fear of unemployment: When you are 54 – you still have 6 years of aggressive investment possible in your life. However the sheer fear of being unemployed can impact your portfolio’s asset allocation.

g. Fear of embarrassment – what will my friends say if I lose money in the market – after all I am a professor, doctor…etc. scares people from allocating money to equities!

h. Fear of Dad / elder’s poor market track record: “My father lost a lot of money during Harshad’s time or Ketan’s time” – this also is a big impediment to investing monies in equities.

i. Fear of missing out on opportunities: ‘If I do not buy a flat for my sons in Kharghar today, it will be out of their reach for the rest of their lives” – fear of missing out on opportunities is a big fear. Same for gold – ‘I need to buy gold for my daughter’s wedding’ – otherwise I will never be able to buy it. Fear of the unknown.

j. Fear of looking stupid and the fear of admitting that you made mistakes in the past FORCES people to stick to the same portfolio over long periods of time…this can also cripple…

k. The fear of fluctuation is far greater than the fear of inflation. The fear that scares is standard deviation, the fear that kills is inflation….

well, well, God bless.