This recent correction has reinforced my perception that a strong mindset is required for investing. We have always heard psychology is an important part of trading, but not so in investing. I begged to differ as an investor also needs to manage his emotions in a market correction, just as similar to a trader having a drawdown on his capital.

The recent Japan Earthquake crisis is a good example. The markets around the world were reacting to the Japanese stock market, coming down with the latter. I cannot say how much relation or business dealings did the foreign companies had with Japan, but locally, there were some stocks not related to Japan at all, but came down as well. Unless you are a believer of the Butterfly Effect – A butterfly flapping its wings in say China can create ripple effect and cause a tornado in Brazil, I do not ...