1. All markets are highly correlated when the market falls. Thus diversification may not reduce your risks too much !
2. It's human beings who trade in shares. So fear and greed drive the market much beyond fundamentals.
3. The correction may cont get over in a day or two. It can be deep and painful. It will test our conviction.
4. Currencies may correct alongside stocks . Thus the dollar returns on emerging market equities will suffer on both counts .
5. Reduce leverage; margin calls and stop losses may deepen the correction.
6. Have the courage to buy when other sells : Down one year someone will say we should have bought those good stocks when it corrects much beyond its fundamental value.
7. Everyone is a great stock investor when all shares goes up my every day. We have to control our emotions. Overcome greed and panic to become a successful long term investor.
8. We do not market we buy stocks . Understand your investments and buy when you see value.
9 . In the long term , historical returns from equity has been much higher than fixed deposits.
10. Panic and Euphoria are the two enemies of Investors . Traders should have clear stop losses for their trading positions.