The Psychology of Investing: How to Conquer Market Volatility
Investing is often described as a test of patience, but in reality, it is a test of human psychology.
Market corrections are not new. History has shown that downturns, while uncomfortable, are an inevitable part of the investment journey. Yet, despite this knowledge, 9 out of 10 DIY investors stop their SIPs within five years. Why? Because when markets decline, emotions take over.
Investors, who were once optimistic during market highs, begin to second-guess their decisions. They see their portfolios shrinking, and fear sets in. The instinct to protect capital overrides logic, leading many to halt their investments or exit the market altogether.
Understanding Investor Psychology: Why Do We Panic?
When markets fall, investors don’t see opportunity, they see losses. This reaction is deeply rooted in behavioral biases:
Loss Aversion: Studies show that people feel the pain of losses twice as much as the joy of gains. This makes temporary market declines seem far worse than they actually are.
Recency Bias: We tend to believe that the current situation will continue indefinitely. A market downturn feels permanent, even though history proves otherwise.
Herd Mentality: When investors see others panicking, they follow suit. Fear spreads, leading to irrational decisions that often lock in losses.
This is why so many investors abandon their SIPs at precisely the wrong time when they should be continuing, or even increasing, their investments.
Every Market Correction Brings an Opportunity
Consider past crises:
In 2008, the Sensex fell nearly 60% from its peak only to recover and scale new highs.
During the COVID-19 crash, the market dropped 38% yet those who stayed invested saw extraordinary gains in the following years.
Each downturn has rewarded those who remained patient. The fundamental truth of investing remains unchanged: market fluctuations are temporary, but long-term wealth creation is permanent.
The Importance of a Structured Investment Approach
Successful investors don’t react to the market. They follow a process. A disciplined strategy ensures that investments are protected during downturns and positioned for growth during recoveries.
At Enrichwise, we always follow a structured framework:
For Old Money (existing investments): We implement our #PRAG Process (Protect and Grow) to ensure portfolios remain resilient.
For New Money (fresh investments): We encourage investors to continue and even increase SIPs to accumulate more units at lower valuations, positioning for stronger future returns.
A sound investment strategy is not just about selecting the right stocks or funds. It’s about staying the course, managing risks, and avoiding emotional decisions.
Navigating Volatility with a Long-Term View
It is natural to feel uncertain during market corrections. But history shows that those who remain invested benefit the most when markets recover. Having a structured plan and the discipline to follow it is often what separates long-term success from short-term setbacks.
For investors looking to maintain clarity amidst volatility, a well-thought-out approach can make all the difference. Whether it is reviewing asset allocation, managing risks, or maintaining the discipline to stay invested, having a structured process in place ensures decisions are made objectively, not emotionally.
Markets fluctuate. Strategies endure.
At Enrichwise, we help investors build and follow a disciplined approach to wealth creation, so you don’t just invest, you invest wisely. Let’s navigate the market together.

Connect with us today.
Contact +919821860804 or email planner@enrichwise.com

Kapil Jain is the Director of Enrichwise Financial Services Pvt. Ltd and Enrichwise Insurance Broking Services Pvt. Ltd., an IIM Indore Gold Medalist in Finance and an investor for 25+ years.