Did you know, 11 years ago in 2008, when the domestic equity markets started correcting, they didn’t stop till the benchmark indices had lost more than 50% of their value, and that too in a span of 8 odd months?
The Nifty 50 index corrected 59% from its peak in January 2008 to the bottom in March 2009, at the same time, the Nifty 100 was down 61% and the Nifty 500 fell 64%.
Let’s look at where we are today. At Nifty of around 11,250 we are 80% higher compared to the peak of 2008 and almost 3.5 times higher compared to the bottom seen in 2009.
Should you now stop investing and wait for the bottom? You could, but for that you would need a crystal ball to tell you exactly where the bottom is. In the absence of such super powers, one can do what common sense says is the best path, continue regular investments with the knowledge that you will invest some when the market does hit a bottom.
If you only invest when the market is moving higher, your gains will look limited. It’s when you invest in a downturn, that your average purchase price moves lower, hence, you see a better gain when you withdraw.