Massacre..... Mayhem.... Bloodbaath....
Recently, As a market participant / an enthusiast... I m sure, you would have come across these words regarding the financial markets... They are spread either by them who know the inherent potential of markets or by someone with no interest or knowhow...
Those who are untouched with it.... well... Great... and You shouldn't be as such.....
This is going to be a lengthy post, mainly for those who feel shattered/devastated/exhausted/frightened/demotivated/ with this market move....
My advise to them... is... Just hold on....
And, I never say this, but looking at the current scenario and recent interactions with you all,
request you to share it with those it may matter... if you find it useful
So, from the life high of around 12.4k, Nifty has fallen to 9.5k,which is a fall of close to 20%... (at the time of writing this post, SGX Nifty is already trading near 8.6k levels)
Firstly... This is not the only time when markets are down more than 15-20%, earlier in 2008, 2011, 2016 and 2018 Nifty the same thing has happened...
In fact, in 2008, due to the global sub prime crisis, Nifty was down by almost 65% from the top, so relax... though this is not usual, it's not a massacre / mayhem.....
Now the next point is, why are we falling... So we are falling, along with the global indices which are down by almost the same magnitude... Reason being... a mix of Corona virus outbreak and global oil price war, coupled with domestic and global economic slowdown concerns....
Which means, it's not only India... like the fall of 2008, the entire globe is down by 12 to 30% approx
Is the fall over, where will it stop?
Honestly, as stated above, there were bigger falls, and we can't say...
(Will be posting my technical report soon, please click here. for the same)
What's important here is to know is....
What usually happens after a fall of such a quantum...
Historically, since the last 15 odd years, for which I am following the Indian markets, it is observed, that after a fall of anything above 10-20%, on an average...
Next 1 year returns are ~ +30%
Next 2 year returns are ~ +50%
Next 3 year returns are ~ +65%
Next 5 year returns are ~ +100%
Source... Nifty Daily/Monthly data... anyone can check the major falls I stated above...
Just to give an instance...
Before the fall, in 2008 Nifty fell from 6.3k levels to 2.2k levels in Oct 2008..
But within 2 years, in 2010 November, Nifty was back at that level, which is almost a 300% rise...
Which means, be it a financial crisis, or any other type of crisis geo political, social, medical ,etc, Markets have always handled it, sooner or later....
So, now the big question is
What do we do now....
For seasoned traders, request you to refer to my other post
#MarketUpdate - Leee Bazaar, Nifty 9 Hajaar.... Ab kya Vichaar? (Advanced Technicals)
But for long term investors, like I have been saying umpteen number of times in my sessions, investing is Buy and Hold (the quality stuff, off course...)
Hence, this is a time to BUY or ADD On to the quality ...
For some of you, especially new entrants, this might really sound, idiotic/pathetic/illogical,
but trust me, you will thank me in 2030..... for sure...
Even if, anyone is not able to dare to buy right now, my suggestion is, at least DONT SELL, let the markets settle, which might take a few month or even this entire year, and then enter, but do not sell in panic....
I am not getting in to the specific stock selection, as it demands a bit of expertise... My advice to anyone is at least enter in to Index ETF, in a staggered manner (SIP)... (ETFs - NiftyBees, JuniorBees, M100, BankBees, PSU BankBees, Gold Bees (as a hedge)
I feel, and practice this... Usually, any 10% fall in the main index calls for averaging out for lowering the cost of purchase....
Ending up with a quote by Mr. Warren Buffet...
"Be fearful when others are greedy, and greedy when others are fearful"
This quote, is very famous and well known, even to the new entrants...
but trust me... very hard to Act upon....
This topic is never rending, and to know about more and detailed dimensions, you all have my contact details, feel free to revert....
Cheers
Hrishi....
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