THE LONG HISTORY OF UPS AND DOWNS

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24th February 2022, the day when Mr. Putin announced his invasion of Ukraine, Indian markets fell more than 4% in a single day. Since then, our markets haven't reached the pre-war stage. For the first half of this year, our markets were bleeding. Nifty fell around 15% in that time period. Today, just 9 months after that event, our markets have gained momentum and we are heading towards the 18000 mark once again. This is some kind of growth. But this has not happened for the first time. Time and again, Indian markets have proven the statement, "Indian markets are not meant to stay down for long". Let's look at the top 10 corrections that took place in the Indian markets and how long it took for recovery. 

The below numbers represent fall in BSE index (SENSEX)

In 1982, Indian markets fell more than 19%. It took only 90 days for our markets to recover fully. During 1986-1988, SENSEX fell more than 41%. It took 4 complete months to recover such a fall. During 1989-1990, markets fell 18%. It took only 3 months of buying to recover completely. During 1992-1993, markets fell 54% and took 18 months to recover. During 1994-96, markets fell 41% and recovered in 6-7 months. During the tech bubble of 2000, markets fell 56% and took 2 complete years to recover. During the financial crisis of 2008, markets melted by 61% and took 1 year to recover. During the 2010-11 crisis, markets fell 28% and recovered in 7-8 months. During 2015-16, markets fell 23% and recovered in 5 months. Lastly, during the pandemic, markets crashed more than 38% and only took 2 months to recover. 

An observation shows that after every deep correction, markets have made new highs. There are a few lessons which a market crash tech us. They are:

1. Never try to time the markets. Markets are always superior. 
2. One of the greatest investment opportunities are found during market crashes. 
3. For those who are not into finding individual companies, SIP is the best option. 
4. It may take some time, but the markets will have to recover. They can't stay low for long. 
5. Build a long-term mentality. Selling great companies when markets aren't performing is like cutting down trees and watering the weeds. That's what Peter Lynch used to say. 

So, hold right, hold tight and enjoy the long-term game.  

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