An economic prognosticator like Roubini has credibility because of his prediction of the 2008 global financial and economic crisis. Though his current prophecy does have the virtue of reasoned logic, it’s not written in stone. If Roubini was asked early 2009, when the Dow Jones was at 8,000, if there were a possibility of it touching 13,000 within three years, he would have probably scoffed. Yet, that is what happened.

So what does it mean for you as an investor? Roubini stirring things up does not mean you need to run amok. Keep your cool. Emotions (be it greed or fear) are an investor’s worst enemy. Fear can dissuade you from doing what in normal times would be a simple process.

We once again reiterate the fact that you need to ignore the noise and invest in stable equity funds that buy good stocks with strong fundamentals. Do not abandon your systematic investment plan (SIP). For instance, if you started an SIP in Franklin India Bluechip for Rs 1,000/month on January 1, 1994 and continued for 18 years (ending December 31, 2011), you would have earned an annualized return of 23 percent. During this time, the stock market would have gone through various upheavals- the 1997 Asian financial crisis, the dot com bust, the 2001 India-Pakistan standoff that brought both sides close to war, the 9/11 terrorist attacks on the Twin Towers in New York, the global financial crisis, and the ongoing European debt debacle.