On Monday last, most Indian stock indices ‘crashed’ by about 2%. Immediately the media wrote columns as to why this occurred. The next day there were hand-holding articles as to why one should not be scared of such market movements. A case of, ‘pinch the baby and rock the cradle’.
Here is a series of Nifty graphs in this regard.
A single-day fall of 7% or more
We have had a 12% fall and ~ 8% fall in the middle of a bull run (Jan 2004) and another ~8% fall in late 1998.
So, the next time there is such a single day fall, can we assume the market has crashed and that we are heading towards a bear market?
A single-day fall of 5% or more
Should be cut our losses and exit when there is a 5% or higher fall?
A single-day fall of 2% or more
A single-day fall of 2-3%
Does this put Mondays ‘crash’ (rightmost red dot) in perspective?
If it does, keep calm and MDBSC* on
If it does not, if you feel compelled to fret over the reasons for the fall, if you need hand-holding and reassurances that ‘we are still in a bull market’ and that ‘all will be will’, get out of equity today and stick to fixed-income products.
‘Wealth creation’ is not for the faint hearted.
Subscribe and join the freefincal Youtube community!
Connect with us on social media
- Twitter @freefincal
- Subscribe to our Youtube Videos
- Posts feed via: Feedburner
- We are also on Google PlusandPinterest
Do check out my books
Get it now. It is also available in Kindle format.
Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You WantMy second book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at low cost! Get it or gift it to a youngearner
The ultimate guide to travel by Pranav SuryaThis is a deep dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, how travelling slowly is better financially and psychologically with links to the web pages and hand-holding at every step. Get the pdf for ₹199 (instant download)
Free Apps for your Android PhoneAll calculators from our book, “You can be Rich Too” are now available on Google Play!
Install Financial Freedom App! (Google Play Store)
Install Freefincal Retirement Planner App! (Google Play Store)
Find out if you have enough to say "FU" to your employer (Google Play Store)