Markets Always Face Big Shocks
In the last 100 years, markets have seen many very bad years. In the 1930s, the Great Depression hit hard. In the 1940s, World War Two shook the world. Later came the Korean War, the Vietnam War, and many other global events. (see the image below)
Every few years, something big happens that creates fear and heavy losses in the market.
Crises Keep Coming Back
After wars, markets faced new problems like high inflation in the 1970s, commodity trouble, and real estate issues. The 1980s saw banking failures and problems in emerging markets. In the 1990s, Asian markets also collapsed. These events show that market shocks are not rare. They keep coming again and again.
Big Crashes in Modern Times
In 1987, the Black Monday crash shocked investors. In 2000, the tech bubble burst. In 2001, markets fell again after major global events and wars. In 2008 and 2009, the global financial crisis caused panic everywhere. In 2020, the pandemic created another deep fall. Even in India, events like demonetization and political changes hurt the market for some time.
Why People Leave the Market
Almost every decade, the market takes a big hit. When this happens, many people leave the market after losing money. They feel the market is not for them anymore. Fear takes over, and they stop investing. This has happened many times in the past.
New Investors, New Highs
After every crash, new investors enter the market. The first two or three years after a fall often bring strong recovery. Those who stay invested see good gains. After the 2020 crash, many new investors joined and made strong returns in a short time. But many old investors who exited could not come back and missed the rise.
Staying Invested Matters Most
The key lesson is to stay in the market for a long time. Time spent in the market matters more than trying to time it. Whether the market goes up or down, staying invested is important. Using options that adjust with the market and remove weak areas can help over long cycles. Over five to eight years, this approach can build real wealth. Staying patient is the real long-term strategy.
