Reality Check

Fundamental principles are often forgotten during bullish times. This year's experience only underlines the importance of sticking to the basics

Uncertainty stalked the equity markets this year. A securities scam early this year sent shares into a tailspin and left the investing community with huge losses on their hands. The rash of bad news continued as the growing recession across the world and terror attacks in September dragged the markets to new lows.

But this was also juxtaposed with far-reaching changes in the markets as the Securities and Exchange Board of India pushed the reforms button. And now as 2001 draws to a close, fears of a war with neighbouring Pakistan cloud the air. The uncertain times simply refuse to end.

However, there were some lessons to learn this year. There weren't any new insights, but they underlined how crucial it is for investors to cling to the fundamental principles of investing that, somehow, seem to vanish into thin air during a galloping bull market frenzy.

The year also had its usual share of stock casualties. The securities scam unearthed earlier this year led to a bloodbath that carved off Rs 1.5 crore in market capitalisation in just eight days. The wounds were even deepened in stocks like HFCL, Zee and Global Telesystems