At 1804 hours on August 23, 2023, in a historic moment, India became the first country to successfully perform a soft landing on the south pole of the moon through its lunar exploration mission, Chandrayaan 3.
The spectacular space mission also catapulted India into an elite group of nations – the erstwhile USSR, the US and China – to successfully land a rover on the moon.
But India’s space journey to the moon wasn’t a sort of gamble that just hit right at the first instance.
On July 13, 2023, when India embarked on its lunar expedition with Chandrayaan 3, carrying the lander Vikram, it was the back of a long list of space exploration missions that bears testament to the patience and unwavering determination of the nation’s prowess and excellence in the field of space exploration.
It had all the hallmarks of persistence, timing, stability, and diversification that investors can take a cue from in their investing journey
This was India’s third Chandrayaan mission; the second one had failed partially, but that didn’t deter India from forging ahead with its space exploration programme.
Just as lunar ventures present risks and rewards, investments giving larger returns will be subject to market risks and can even lead to short-term losses. So, by embracing a long-term perspective, investors can learn from previous experiences, and persistently continue with their investing journey.
Persistence means holding back some of your salary, putting it in the market, and patiently waiting for it to gain in value.
Learning From Setbacks: Chandrayaan 2’s Impact On Chandrayaan 3
The Indian Space Research Organisation (ISRO) drew valuable lessons from the Chandrayaan 2 mission and the challenges it faced. Chandrayaan 3 benefited from Chandrayaan 2’s orbiter data.
Likewise, investors encounter inevitable mistakes and can gain fruitful insights from them. Also, just like the Chandrayaan 2 orbiter helped Chandrayaan 3, investors can use data from their existing investments to vigilantly assess market dynamics, evolving risks, and the sudden changes impacting their investments.
Soft Landing Is Must When Nearing Retirement
Soft landing, which is the toughest phase in any moon landing mission, underscores the importance of minimising volatility when nearing retirement. The landing gears of Chandrayaan 3 were better equipped to absorb shock loads while landing in comparison to those on Chandrayaan 2.
Similarly, investors should prioritise capital preservation over rapid growth, and ensure a balanced allocation towards stable instruments like debt while reducing equity exposure as they near their retirement.
Essence Of Timing: Chandrayaan 3’s Orbital Precision
Chandrayaan 3’s strategic advantage lay in patiently circling around an elliptical earth orbit, thus leveraging the Oberth effect. The Oberth effect helped it to get the right time to start off on its journey to the moon’s orbit.
Similarly, market timing influences investment outcomes. During downturns, selecting fundamentally sound stocks and initiating mutual fund systematic investment plans (SIPs) can yield prudent results. Although starting in a bear market can give higher returns, any time can be the right time to initiate investments.
Compounding Power And Oberth Effect
Chandrayaan 3’s utilisation of the Oberth effect—a small impulse yielding significant orbital energy change—parallels the power of compounding in investments. A minor change in investment horizon significantly impacts the corpus growth over time.
Diversification For Stability
Chandrayaan 3 had many instruments that mirrors the importance of portfolio diversification. In the event one instrument malfunctioned, Vikram had other instruments to perform the same function.
Likewise, as different assets react diversely to varying market conditions, investors should mitigate downturns by spreading investments across asset classes. Even if one instrument doesn’t perform well, another instrument will give good returns. For instance, stocks may depreciate in a downturn, but bonds or commodities may perform well in that market phase.