If your stock portfolio looks like a sea of red right now, trust me, you’re not alone. I’ve been there, and I am there as I write this blog post. The Nifty 50 has corrected by about -14% since its peak in September 2024, and my portfolio? Let’s just say it’s been a rollercoaster. I was aware that such phases are inevitable in stock investing, but I was not expected it at this point in time. Some of my mid and small-cap stocks are in deep red, and I’ve also run out of cash to invest more in this dip. Sound familiar? If it does, let’s talk about how to deal with this mess without losing our sanity.
A Story First
I’ve been dabbling in stocks since 2008-09, right around the time the world was reeling from the financial crisis (US subprime mortgage crisis of 2008-09). Back then, I was a newbie, throwing money into equity mutual funds and learning the ropes.
Fast forward to 2017, I hit reset. I quit my job to go self-employed. In this moment, I liquidated a chunk of my portfolio, and started rebuilding from scratch.
Then came 2020—COVID hit, markets crashed, and I saw an opportunity. Post-COVID, I went all in, buying aggressively as the Nifty corrected 16% between October 2021 and June 2022.
It felt smart at the time. Quality stocks at bargain prices? Yes, please.
And now, here we are in 2025, and the market’s throwing another tantrum.
My portfolio’s XIRR (that fancy annualized return metric) is still hovering above 15%, which isn’t terrible, but the daily grind of watching stock prices slide is testing my patience. Mid-caps and small-caps are getting hammered the hardest, and I’m out of cash to average down.
It’s like being stuck in traffic with no gas left in the tank, just waiting for things to move and clear-up on its own.
The Emotional Side of A Red Portfolio
Let’s be real, seeing your portfolio bleed day after day isn’t fun.
You start questioning everything. “Did I pick the wrong stocks?” “Should I sell and cut my losses?” “Is this the beginning of a bigger crash?”
I get it, it’s tempting to panic. But here’s the thing to think about, I’ve learned over the years, markets move in cycles. Ups, downs, sideways, it’s all part of the game. If you’re in it for the long haul (and I assume you are if you’re reading this), these down-cycles are just bumps on the road.
Right now, I’m not selling. Why? Because I believe in the businesses I’ve invested in.
My portfolio has only quality stocks (I do not my stock analysis using my Stock Engine). In my portfolio the mix looks like this:
- Large-caps (50%),
- Mid-caps (37%),
- Small-caps (9%), and
- A sprinkle of micro-caps (4%).
I’ve spread my bets intentionally, no putting all my eggs in one basket. Are they all performing like champs right now? Nope. But I didn’t buy them for a quick flip. I bought them because they’re solid companies with strong fundamentals.
And if history’s taught me anything, quality always bounces back.
The Cash Crunch Dilemma
Here’s where it gets tricky for me. I generally wait for markets like these, where it looks like it has bottomed, and one can go all-in into quality companies. I’d love to buy more right now. Dips like this are golden opportunities to scoop up great stocks at discount prices.
But guess what? I’m tapped out. No more cash to deploy. It’s frustrating because I know this is the time to double down, but my wallet’s telling me, “Sorry, bro, you’re done.”
I bet a lot of you are in the same boat.
After years of investing, there comes a point where you’ve put in all you can, and the market decides to test your resolve by dropping further. Selling now to free up cash? That’s a terrible idea when everything’s has corrected so much, it not the rime to sell.
So, what do you do? You sit tight and do nothing (for this moment). I feel trapped, but this is the way to deal with this kind of market cycle.
My Strategy is Patience, Not Panic
When the market’s falling every day, my number one rule is simple, stop checking your portfolio obsessively.
Seriously, close that app. Looking at those red numbers won’t make them turn green, it’ll just mess with your head. Instead, zoom out. Think about why you invested in the first place. For me, it’s about building wealth over decades, not months. This correction? It’s temporary. The next up-cycle will come, and when it does, those beaten-down stocks could be the ones leading the charge.
The trick is to stay invested (in quality companies), till the next up-cycle comes. If you’ll sell now, you will not be able to capitalize the next bull run.
Another thing I’m doing is sticking to my diversification. Large-caps are my anchor, they’re not dropping as hard as the smaller ones. Mid-caps and small-caps, though? They’re volatile, no doubt. But that’s their nature. They fall harder in corrections, but they also soar higher in recoveries.
Micro-caps are my wild card, a tiny portion of my portfolio, but I’m okay with the risk because I’ve kept it small.
What If You’ve Got Cash to Spare?
If you’re luckier than me and still have some investible cash left, this is your moment.
Corrections like this, 14% off the Nifty’s peak, are when legends are made.
Pick quality businesses, not just cheap stocks. Look at their earnings, their debt, their growth potential. Don’t just buy because it’s down 30%, buy because it’s worth owning for the next 5-10 years.
And if you’re out of cash like me? Don’t beat yourself up. You can’t time the market perfectly every time.
The Waiting Game
Why it’s worth it?
Here’s the unglamorous truth, sometimes, investing feels like being stuck. You can’t buy more, you don’t want to sell, and all you can do is wait.
But that’s okay. Markets don’t stay down forever. Look back at 2001, 2008, 2020, or even 2021-22, every dip eventually turned into a climb. The key is not to sabotage yourself by selling at the bottom.
I’ve seen too many people panic, cash out, and then kick themselves when the recovery hits.
When the next cycle turns up, I’ll take a hard look at my portfolio. Maybe rebalance a bit, trim some winners, add to the laggards that still have potential. But for now? I’m holding steady. No rash moves. No knee-jerk reactions. Just faith in the process.
Conclusion
If your portfolio’s red and you’re feeling the heat, take a deep breath.
You’re not failing, you’re just in the middle of a cycle every long-term investor has to face. It’s not about avoiding the downs; it’s about riding them out.
Keep your eyes on the big picture. If you’ve got good companies in your portfolio, they’ll come back stronger. And if you don’t? Well, maybe this is a wake-up call to rethink your picks. But that’s a decision for calmer days, not now in a mid-correction chaos.
So, hang in there. We’re in this together. The market might be testing us now, but it’s the ones who stay the course that win in the end.
Drop a comment, I’d love to hear how you’re navigating this down-cycle.
Have a happy investing.
