Source: MFI (MFI Explorer is a tool provided by ICRA Online Ltd. Data as of Feb 29, 2020. Past performance may or may not sustain in future. *All returns mentioned are 1Y returns except for Feb-16 to Nov-16. For 2008 to 2009, Period considered is 20-Nov-08 to 20-Nov-09, For 2011 to 2012, Period considered is 20-Dec-11 to 20-Dec-12, For 2013 to 2014, Period considered is 31-Aug-13 to 31-Aug-14. For 2018 to 2019, Period considered is 30-Nov-18 to 31-Dec-19. Returns are in absolute terms except for the period 2018 to 2019 which are CAGR returns. #1 The graph shows numerous instances of dramatic market falls over the past decade and also the recovery witnessed post these falls. During the 2008 Lehman Crisis, the Sensex dropped as low as 8451 in Nov-08 from 20301 levels seen in Jan-08, post which markets delivered 101% absolute returns the next year. Many such instances of markets bouncing back post corrections have been witnessed in the past. Every crisis might be different but historical data shows that the way markets react is more or less similar ie markets fall during crisis and bounce back over a period of time. Hence, as an investor you should take advantage of this opportunity by investing when markets are at lows. #2 From the Lehman crisis in 2008 to the NBFC crisis in 2019, the graph above is clear on one thing: markets have fallen, but they have also bounced back. Those who stayed invested from 2008 to 2019 weathered multiple market crashes, but in the long-term their wealth grew. The above historical data not only gives us the courage to stay invested during the current Coronavirus crisis but also reminds us that falling markets offer our Fund Managers an opportunity to pick good companies at cheap valuations. Hence, stay invested and stay focused on your financial goals.
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