Is this market correction similar to 2015-16...can it recover like 2016-18?
As an investor the last few days might have been tough due to relentless fall in the markets
What's reassuring is that similar falls have happened in the past and we don't even remember them ๐งต
(1/n)
As an investor the last few days might have been tough due to relentless fall in the markets
What's reassuring is that similar falls have happened in the past and we don't even remember them ๐งต
(1/n)
Most of us are aware of 2008 global market crisis and the resulting crash or the Mar'2020 Covid-19 induced market correction
But, are you aware of the 2006 market correction? Probably not, because it lasted just a month
(2/n)
But, are you aware of the 2006 market correction? Probably not, because it lasted just a month
(2/n)
You will be shocked to know that in that 1 month SENSEX dropped 30% and Small Cap index dropped 50%
10th May'06 - SENSEX - 12612
14th Jun'06 - SENSEX - 8929
Post that, we all know SENSEX recorded a strong up move to 21,000 till Jan'08 from lows of 8900 recorded in Jun'06
(3/n)
10th May'06 - SENSEX - 12612
14th Jun'06 - SENSEX - 8929
Post that, we all know SENSEX recorded a strong up move to 21,000 till Jan'08 from lows of 8900 recorded in Jun'06
(3/n)
Let's see if the ongoing correction has some similarity to 2015-16 correction which we are sure you don't remember much
Before that though
No two corrections are exactly same; however there's no harm in looking at market history and getting some data to get perspective
(4/n)
Before that though
No two corrections are exactly same; however there's no harm in looking at market history and getting some data to get perspective
(4/n)
2015-16 correction:
NIFTY SMALLCAP
7th Aug'13 - 2553
13th Apr'15 - 6038 โฌ๏ธ136%
29th Feb'16 - 4362 โฌ๏ธ28%
What happened after 28% correction?
15th Jan'18 - 9580 โฌ๏ธ120%
(5/n)
NIFTY SMALLCAP
7th Aug'13 - 2553
13th Apr'15 - 6038 โฌ๏ธ136%
29th Feb'16 - 4362 โฌ๏ธ28%
What happened after 28% correction?
15th Jan'18 - 9580 โฌ๏ธ120%
(5/n)
2011-13 market was just as bad as 2018-20 market for small and mid caps
Similarly, like Mar'20 correction, NIFTY SMALLCAP recorded a sharp fall of around 36% from Jan'13 to Aug'13
(6/n)
Similarly, like Mar'20 correction, NIFTY SMALLCAP recorded a sharp fall of around 36% from Jan'13 to Aug'13
(6/n)
As the valuations had gotten very low, markets recorded sharp recovery with Small cap index moving up 136% from Aug'13 to Apr'15
Post that markets went into a consolidation mode and the small cap index dropped by 28%
(7/n)
Post that markets went into a consolidation mode and the small cap index dropped by 28%
(7/n)
Like what's happening these days, from Jan'16 to Feb'16, the small cap index dropped by 24%
What happened after Feb'16? - Small cap index again recorded a strong up move of 120% till Jan'18
(8/n)
What happened after Feb'16? - Small cap index again recorded a strong up move of 120% till Jan'18
(8/n)
Question is, are there similarities between 2011-15 and 2018-22 and can the markets recover just like they did from 2016 to Jan 2018?
Now look at 2020-22 data
NIFTY SMALLCAP
23rd Mar'20 - 3372
14th Oct'21 - 11596 โฌ๏ธ244%
12th May'22 - 8650 โฌ๏ธ25%
(9/n)
Now look at 2020-22 data
NIFTY SMALLCAP
23rd Mar'20 - 3372
14th Oct'21 - 11596 โฌ๏ธ244%
12th May'22 - 8650 โฌ๏ธ25%
(9/n)
2018-22 market movement has been very similar to 2011-15 market movement
Slow grinding fall (2011-13 and 2018-20), followed by major corrections (2013 and 2020), followed by strong up move (2013-15 and 2020-22) and similar fall of around 24-28% (2016 and 2022)
(10/n)
Slow grinding fall (2011-13 and 2018-20), followed by major corrections (2013 and 2020), followed by strong up move (2013-15 and 2020-22) and similar fall of around 24-28% (2016 and 2022)
(10/n)
We can't know for sure if markets will stage a strong up move or not?
If they do, this correction will be forgotten just like the 2 discussed above
What's important is that this correction is not unique
Markets move in cycles and this is one of those down cycles
(11/n)
If they do, this correction will be forgotten just like the 2 discussed above
What's important is that this correction is not unique
Markets move in cycles and this is one of those down cycles
(11/n)
Remember, FDs were being made fun of in 2021 and now Equities are being mocked in 2022
Don't get into the trap of mocking...both have their own significance
(12/n)
Don't get into the trap of mocking...both have their own significance
(12/n)
Just like you don't invest 6-24 months emergency funds in equities
Similarly, despite interim corrections, it makes sense to invest in stocks if you have spare funds for 3-5 years
(end)
Similarly, despite interim corrections, it makes sense to invest in stocks if you have spare funds for 3-5 years
(end)
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