The Great Unraveling:
A Tale of Two Investors, One Market Crash, and a Fortune Lost to Fear
It was the summer of 2014 when two college friends, Ravi and Amit, landed their first real jobs. Sitting in a café, celebrating their new beginnings, they made a pact. They would start investing in mutual funds—₹10,000 each, every single month. It was their ticket to financial freedom, their retirement dream, their “someday” fund.
They chose similar aggressive equity funds, set up their automatic SIPs, and for a while, life was good.
✨ The Golden Years (Years 1–5)
For the first five years, their portfolios grew like a well-tended garden. They enjoyed an average return of about 12% CAGR. By the end of Year 5, both had diligently invested ₹6,00,000. Thanks to compounding, their portfolios had blossomed to roughly ₹8,11,000 each. They felt invincible.
⛈️ The Storm Breaks (Year 6: The Crash)
Then came the storm. Global war fears, markets in free fall — a 40% crash. Their ₹8,11,000 shrank to about ₹4,86,600 overnight.
“I’m stopping my SIP until this chaos is over.” — Amit
| Year | Event | Ravi (Disciplined) | Amit (Fearful) |
|---|---|---|---|
| 1-5 | Steady growth | SIP ₹10k/month Invested: ₹6,00,000 Value: ~₹8,11,000 | SIP ₹10k/month Invested: ₹6,00,000 Value: ~₹8,11,000 |
| 6 | Market crashes -40% | SIP ↑ ₹12k/month Value after crash: ~₹4,86,600 | SIP STOPPED Value after crash: ~₹4,86,600 |
| 7 | Recovery begins | SIP ₹12k/month | SIP STOPPED |
| 8 | Market recovers | SIP ₹12k/month | SIP restarted ₹10k/month |
| 9-10 | Long-term growth | SIP ₹12k/month | SIP ₹10k/month |
The cost of a two-year hiatus wasn’t just the money not invested — it was the fortune those missed investments would have grown into.
🧠 The Behavioral Economics of a Meltdown
If Amit had restarted just one year later (Year 7), his final corpus would have been ~₹28,50,000 — still ₹4.4 lakhs more than his original outcome. Restarting early is the next best thing.
📌 3 Actionable Lessons for Every Investor
- Have a Pre-Nup with Your Portfolio: Write down: “In a crash of 20%+, I will not stop SIP — I’ll try to increase it.” Follow the contract, not fear.
- Don’t Confuse a Price Drop with a Principle Drop: A crash is a price drop, not a change in the principle of long-term equity investing. Quality companies survive.
- Sweat Your Monthly Investment, Not Your Daily Portfolio: Your job is to invest consistently. The market’s job is to return over time. Don’t do the market’s job.
— based on a true behavioral story
Prasad Govenkar is an experienced enterprise architect with over 24 years of industry expertise, specializing in telecom BSS solutions and large-scale technology transformations. Alongside his professional career in the technology domain, he has developed a strong passion for personal finance, investing, and wealth
Through InvestIndia.blog, Prasad shares practical, easy-to-understand insights to help individuals take control of their financial future. His approach combines analytical thinking from his engineering background with real-world investing experience, making complex financial concepts simple and actionable.