The best investing style for people who get anxious in market volatility
Equity isn’t perishable. And your portfolio isn’t a roadside stall. Here’s why mindset matters
The purpose of this post is simple: to go a little deeper into each investing style understand their strengths, their limitations, and when they tend to shine or struggle.
But is this essential for every investor?
No. Nothing here is a prerequisite. You don’t have to master investing styles to be a successful investor.
You just have to figure out how this post might be useful to you, based on where you are and what kind of clarity you’re seeking. I can’t define its importance. Only you can.
So take what’s relevant. Reflect on what resonates. Leave the rest for when you’re ready to explore further.
Let’s Get Started
“I want decent growth, but I don’t want to overpay.”
“I want something better than just ‘safe,’ but not too risky either.”
If you’ve ever felt this way while choosing mutual funds, there’s a high chance GARP is what you’re really looking for even if you haven’t heard the term.
What is GARP?
GARP stands for Growth at a Reasonable Price.
It’s not a mutual fund category. It’s a style of investing that sits between two extremes:
Growth investing: Chasing high-earnings companies, often at expensive valuations.
Value investing: Buying beaten-down or out-of-favor stocks, hoping the market will re-rate them.
GARP tries to do something more pragmatic:
Seek companies with consistent, sustainable growth but only when the stock is available at a fair or reasonable valuation.
Note of caution for retail investors
Although these investing styles may seem simple and pragmatic, in reality, they are far more risky and difficult to apply than they appear.
They often look appealing in theory but can be extremely challenging to execute effectively.
My intention is to help you become familiar with the concept of investing styles not to encourage you to try to adopt them yourself. If you invest in mutual funds, selecting and applying these strategies is the job of the fund manager, not yours.
How knowing about these investing styles can help
It’s a great question and one I thought about carefully before writing this post.
In fact, some of these ideas were relatively new to me a few years ago, when I gradually incorporated parts of them into my own investing philosophy. Over time, I saw how they helped me make calmer, more informed decisions.
Let me briefly explain why understanding investing styles can help especially if you’re new.
In mutual fund investing, the biggest challenge isn’t that returns are slow or volatile. The real challenge is that it often feels like nothing is happening.
Our minds especially when we start are less rational and more intuitive. Ironically, we tend to do the opposite of what equity investing requires.
Why is equity investing so counterintuitive?
Because equity is a tradable security.
Unlike a fixed deposit, where the bank promises you a defined interest rate, stocks and equity-oriented funds are priced in real time on an exchange.
But our minds resist accepting this difference. We tend to treat every asset as if it were a fixed deposit or any other simple trade we’re familiar with.
For example, think about buying vegetables. The mindset is always buy low, sell high. Many people carry this same mindset into the stock market. They start buying securities as if they are buying vegetables.
The real problem is that everyone around you encourages you to think and act like a vegetable vendor. And in the process, you forget an important truth: You’re not buying vegetables. You’re buying assets whose value can appreciate over time.
The difference is fundamental. Vegetables are perishable. You can’t store them for long, so the markup or profit margin is thin and time-sensitive.
Assets, in contrast, can grow in value the longer you hold them.
This means prices can fluctuate in the short term, but unlike vegetables, you don’t have to offload them quickly to avoid spoilage.
Lets understand why prices are volatile :
Someone is investing a bonus.
Someone else is redeeming before retirement.
A trader is acting out of FOMO or panic.
The stock exchange doesn’t filter these motivations. It simply aggregates them into the last traded price.
So if you try to make sense of every move every hour, every day it will eventually exhaust you.
You can’t do this every second, five days a week, for decades. That’s why so many investors feel markets are chaotic or unpredictable. In reality, the market is doing its job. We create confusion when we expect certainty.
Understanding investing philosophies gives you something priceless: a pause before you act. When you have a framework, you’re more likely to avoid impulsive decisions.
You don’t have to master every style. But understanding them makes it easier to stay consistent.
What do GARP funds actually look like?
A GARP-style fund will often hold companies that:
Have clean balance sheets
Show consistent revenue and profit growth
Operate in sectors with structural tailwinds
Trade at reasonable valuations relative to growth
Examples might include:
A bank growing at 15% with fair valuations
A consumer company that’s neither cheap nor euphoric
A mid-cap business with growth visibility and low leverage
You’ll rarely find overhyped tech names or deep-discount PSU stocks in a GARP portfolio.
A word on fund managers and costs
Many investors wonder whether all this effort behind the scenes is worth the cost.
The reality is: fund managers aren’t just sitting idle with your money. They often have sleepless nights ensuring your returns are better managed over time.
Yes, you’ll hear influencers criticizing the 0.6% annual expense ratio. They’ll show examples of how 0.6% compounded over 40 years can erode your returns. But let’s be honest:
Most investors don’t stay invested for 40 years in a single fund.
The actual impact of expenses varies by invested capital and holding period.
You buy units of a fund NAVs are already net of expenses.
If you have a better option, by all means invest that way. But don’t abandon mutual funds just because someone oversimplified the math.
Remember: your future self has to live with the consequences of your current decisions.
When does GARP suppose to work best?
In volatile markets, when growth is expensive and value is uncertain
When you want long-term compounding without bold sector bets
If you get anxious during drawdowns and prefer a smoother ride
What happens in GARP-style funds?
This style is a good fit if you:
Want to stay invested for 7+ years without constant second-guessing
Prefer a balanced temperament neither hyper-optimistic nor overly cautious
Value discipline and predictability over chasing outperformance
If you struggle to stay invested during volatility, GARP can be the best behavioral match.
Final thought
Everyone wants high returns with low risk. GARP doesn’t promise that. But it manages the tension better than most.
It helps you:
Avoid overpaying for excitement
Avoid holding duds just because they’re cheap
Stick with a process that’s quietly effective
And most importantly it helps you stay invested. That’s where real wealth is built.
Coming up next on Stock Market Explainers
Why the “best” fund still might not suit you
The problem with switching styles every two years
How to build a style-mix portfolio for different life stages
When to accept underperformance and when to act
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