31 Jan 2024
Investors have to go through several Agni Parikshas to earn returns in market. Well, historically, Indian markets have witnessed various instances of downfall.
In fact, India saw its first market crisis almost 2 centuries ago in 1865, because of the American Civil War.
In 1992- The Harshad Mehta scandal caused the Sensex to drop more than 50% in a single year.
In 2008, the bankruptcy of Lehman Brothers caused Sensex to plunge from 20,000 to 9000 points
In August 2015, the Sensex fell 1600 points due to ripple effect brought on by worries of a slowdown in China.
Again on 9 November 2016, Sensex crashed by around 1700 points, due to the demonetization drive.
On March 23, 2020, the Sensex fell by almost 4,000 points because of global lockdowns brought on by the coronavirus in a single day. Within a week, the Sensex fell from 42,000 to 28,000 points.
SIP returns during these period was negative, see in the table below. But now 4 years later, Sensex touched at an all-time high of 73,000! (Data as on 15.01.2024). And SIP returns have also outperformed during this period. (See the table)
While market disasters are inevitable, recoveries have also been regular. So, you see, there is no gain without pain. To take the benefits of SIP, be ready to go through the Agni pariksha once in a while .
Stock markets by nature react to changing circumstances. No one can predict when you have to face the Agni Pariksha, but market teaches us it happens regularly. Therefore, how much time u stay invested is all that matters. A long-term investing plan can help you to get through such times.
Disclaimer
Source: ICRA
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