Staying the course
The hardest part of investing isn't choosing. It's holding on when everything on your screen says to let go.
Falls are normal
Indian equity markets see a fall of 10% or more in most years, and a fall of 20% or more every few years. Over 2008–09, the Sensex fell about 60%; in March 2020, nearly 40%. Both times, investors who stayed recovered and went on to new highs.
Falls aren't a sign something is broken. They are the reason equity pays more than deposits.
- 2008–09 global financial crisis−61%
- 2010–11 slowdown−28%
- 2015–16 correction−23%
- 2020 pandemic crash−38%
- 2022 rate-hike correction−17%
Approximate peak-to-trough falls in the BSE Sensex. Each was followed by a recovery to new highs.
What to do in a fall
Keep your SIPs running; they're buying at lower prices. Check that your emergency fund means you won't need to sell. If your allocation has drifted far from target, rebalance toward equity. Then stop checking the price every day.
What not to do
Don't stop SIPs. Don't switch everything to FDs “until things settle”, because they settle upward before you feel safe. Don't borrow to buy more. And don't let a commentator's certainty replace your own written plan.
Key takeaways
- 1Double-digit falls happen in most years.
- 2Keep SIPs running in falls; they buy cheap.
- 3A written plan beats in-the-moment feelings.
Try it with your own numbers
Finish this lesson
Reaching the end marks it complete. You can also mark it yourself.
Educational content, not investment advice. Figures are illustrative.