Principals of Economics suggests, whatever that goes up comes down and vice versa. This holds true for all industries and markets. So Stock Markets are no exception.
Staying Invested in the down cycle and continuing the SIPs through the down cycle has always helped, to earn more then the average market returns. The numbers in the image above helps shed light on this principal, where we have shown the highs and lows that the markets have made in the past 3 decades, to help us learn, how the movements in the market have taken place.
The Sensex made a high of 6150 in the year 2000 led by the IT sector led Dotcom boom. From there it made a low of 2594. Sensex rose again from there to make a high of 6249 in 2004 before the next correction that took Sensex back to 4375 so on and so forth.
In the recent past markets made a high of 41945 in the January 2020, which went as low as 25638 in March 2020 due to Covid pandemic selling. From there again Markets went to make a high of 85978 in 2024, which has been the recentest high.
From there we have already seen a 11% fall. Its bound to stop somewhere and make a pull back again. So instead of stopping and booking losses, continue and even add more to enjoy more than average returns in the future.
The normal market returns are 15% CAGR. The over 20% CAGR returns that you would have seen in your portfolios is because of continuing in these times of distress.
SO its time to follow the same strategy. DO Not STOP/WITHDRAW, BUT CONTINUE & ADD MORE & EVENTUALLY EARN MUCH MORE.
Happy Investing.
Team Finkeys Enterprise LLP.
