6-question quiz: how likely are you to panic-sell in the next market crash? Know your threshold before it happens.
Panic selling at market lows is the single most expensive investing mistake. Data shows investors who stayed invested through every major Nifty crash (2008, 2020) earned dramatically better returns than those who sold and waited for recovery.
Your real risk tolerance is revealed by your behaviour when your portfolio is actually down 30-40%, not by what you answer in a risk questionnaire. Most people discover their true tolerance is lower than stated. The solution: keep equity allocation at a level you can genuinely hold through a 40% crash.
For long-term SIP investors: do nothing. Ideally, increase your SIP amount. The worst action is stopping SIPs — you lose the benefit of buying at lower prices. The second worst is selling. Most professional investors underperform simple do-nothing strategies during volatile periods.