WILL THE MARKET RECOVER?

The Most Frequent Asked Question of the Hour

1. WILL THE MARKET RECOVER?
YES, Markets will recover not immediately, but definitely 

2. HOW CAN WE BE SURE?

Tomorrow is unseen, however, history can be used to predict what the future might hold. Therefore, no matter the magnitude of the disaster, markets always comes back

3. THIS EVENT IS DIFFERENT FROM THE PAST AND HISTORY HAS NEVER SEEN ANYTHING LIKE THIS (LOCKDOWN)?

Spanish flu of 1918 was much more deadly compared to this, however, markets did not crash the way it did this time. This makes it different from the past and that’s the primary reason for panic. 

Please note: Every Black Swan event was a first-time affair. 

Financial Crisis of 08-09 was a first-time event. Never in history, had an Investment bank in the USA failed

Dotcom bubble of 00-01 was a first-time event.

When we are going through a crisis, we feel this is the end of the world, however, time heals everything. We need to give time, Time!

Now let’s remember what history has taught us so that we do not commit similar blunders again.

2008 - 09 was witnessed by the majority of us reading this article, if not directly then via news and stories.

Media presented the situation as an ‘Armageddon Day’ Post that event Three categories of people emerged:

Category I - People who panicked and sold their stocks, mutual funds and other equity-related investment. Regrettably, they encountered huge losses.

Category II - People who held their positions and did nothing. Over the next 8-10 years, they made incredible gains.

Category III People who displayed courage and made investments through the crisis. This category of people created wealth. 

Example: One lakh invested in Bajaj Finance during the 08-09 crisis grew to 1.2 crores by 2019, that’s a mind-blowing CAGR return of 62%

GOING FORWARD:

Let’s close our eyes and do time-travel, you have entered 2028-29 now, which category of investors do see yourself.

If you have already sold or want to sell your equity investment, you will be in Category I.

If you are not doing anything, you will be in Category II.

If you are investing in a staggered manner on days markets crack-up, Congratulations you will be in Category III.

To create wealth, you need to see what is not visible today, it is easy to be confident in a bull market, however, it takes courage to be positive and confident when there is blood on the street.

Circumstances like this occurs once in a decade, you need qualified and dependable advisors for handholding.

If you have one, stay in touch and consult them before making any move.

Concluding this article, for now, do share your feedback, it will make us better.

See you next week.

Till then, Safe Investing