Every place I go to I am asked this question: “With forthcoming elections should we invest now or wait for 2019 election results”. Not only doctors, but common investors (I do IAP too), IFA – almost all of them ask me this question.

I reply as follows:

When you and your wife want to buy a car do you first discuss elections? when you want to go on a vacation do you discuss elections?

You need to get a heart attack do you wait for election results?

Nothing we do depends on the elections. Most Indians treat election day as a holiday. Why bother about elections while investing? Makes no sense.

So if you buy a car, Maruti EPS goes up. If you travel the EPS of Indigo goes up. If you have a medical treatment, the EPS of Apollo Hospitals goes up. (yes I have all of them in my portfolio).

Why do we worry so much about elections? Has the media played a role in our election addiction? I seriously think so. Let’s go back to say 1981. Were we so worried about election? I am not sure. Election, budget, Rbi meets – are all more media events. Sure they are trading events. You need to be worried about the day to day movement of the market. None of us of course know what the market will do in the short run. Some us know we do not know, some of us don’t realize that. If you know that you don’t know you are an expert.

So seriously you should not worry about ANY outlier event – like ILFS – occassionally such events will happen. Yes you can use those opportunities to buy some more of the good shares that you already own. Similarly when elections are announced, don’t do anything. Remember that over the last 20 years we have got about 19% returns (including dividends) during which time we have had 3-4 general elections,RBI meetings, state elections, bad budgets, Ilfs, scams, change of government – if you had worried it was ok, but if you stopped your SIP you would have missed the bus. At least if you are tracking China, you would not have to worry about elections. So China has grown faster, but equity returns in India has been better.

Stop worrying about Economics. Worry about personal finance – your personal behavior is far more important than economics.