The biggest investing mistake isn’t market crash, warns CA. He shares his blunt advice

When markets turn volatile, fear spreads faster than facts. Red charts, breaking news alerts, and constant chatter around crashes often push investors into decisions they later regret. But what if the real risk isn’t the crash itself, but how people react to it? Chartered accountant Nitin Kaushik has sparked a conversation online by challenging one of the most common assumptions about investing during uncertain times.

Kaushik explains that panic, not market downturns, is the most reliable way to lose money. Many investors rush to sell their holdings at the first sign of trouble, believing they can exit at the top and re-enter at the bottom. In reality, this timing rarely works. More often than not, people sell in fear and buy back later at higher prices, locking in losses that could have remained temporary.

He points out that markets have endured far worse than short-term volatility—global conflicts, financial crises and even a pandemic. Yet, in each case, recoveries arrived sooner than most expected. The pattern, according to him, is consistent: while headlines amplify fear, markets tend to move forward over time.


A key idea he emphasises is that volatility is not a flaw in the system but a necessary part of generating long-term returns. The real danger lies in reacting emotionally to temporary dips. Selling during a downturn converts a notional loss into a permanent one, especially if the investor exits the market entirely and misses the eventual recovery.

CA's advice

Kaushik highlights the importance of aligning investments with time horizons. For those with a short-term outlook, heavy exposure to equities can be risky. But for long-term investors, even a sharp crash in a given year becomes insignificant when viewed over decades. The compounding effect of staying invested, he suggests, only works if one remains patient through cycles.

Another critical factor he underlines is liquidity. Having enough cash reserves to cover at least a year of expenses ensures that investors are never forced to sell assets at unfavourable prices. This financial cushion provides stability, allowing individuals to ride out downturns without panic-driven decisions.


Diversification, too, plays a central role in his advice. Concentrating investments in a single sector increases vulnerability, while spreading assets across different areas reduces risk and allows investors to wait for market cycles to turn. According to Kaushik, investors should focus on what they can control—asset allocation, emergency funds, and emotional discipline—rather than trying to predict market movements.