correction is temporary growth is permanent .

 There have been 24 market corrections since November 1974, and only five of them became bear markets (which began in 1980, 1987, 2000, 2007, and 2020).

A market correction is typically defined as a decline of 10% or more in a stock market index, while a bear market is usually defined as a decline of 20% or more. Based on these definitions, there have been 24 market corrections since November 1974, as I mentioned, but only five of them have turned into bear markets, which are:

1. 1980 Bear Market: This was caused by high inflation, rising interest rates, and the Iran hostage crisis. The S&P 500 index fell by 27% from November 1980 to August 1982.

2. 1987 Bear Market: This was caused by a combination of factors, including rising interest rates, a strong dollar, and the use of computerized trading strategies. The S&P 500 index fell by 33% in just over two months, from August to October 1987.

3. 2000-2002 Bear Market: This was caused by the bursting of the dot-com bubble, which inflated stock prices for many internet-related companies to unsustainable levels. The S&P 500 index fell by 49% from March 2000 to October 2002.

4. 2007-2009 Bear Market: This was caused by the housing bubble, which had led to widespread speculation and risky lending practices in the real estate market. The S&P 500 index fell by 56% from October 2007 to March 2009.

5. 2020 Bear Market: This was caused by the COVID-19 pandemic, which led to widespread lockdowns and economic uncertainty. The S&P 500 index fell by 34% from February to March 2020.

The statement "in equity market growth is permanent, correction is temporary" is a common belief among many investors. The idea behind this statement is that over the long term, the stock market tends to increase in value due to economic growth, innovation, and other factors, resulting in higher stock prices. However, in the short term, the stock market can experience corrections or declines due to various factors, such as economic recessions, geopolitical events, or changes in interest rates.

It's important to note Investing in the stock market always carries a degree of risk , last 49 years market has given better returns but only 30% of investors generated wealth, why not others.

Having a financial advisor can be beneficial for many people in their investment journey. A financial advisor can provide professional guidance on investment strategies, asset allocation, risk management, tax planning, retirement planning, and other financial matters.

An experienced financial advisor can help you create a personalized investment plan that aligns with your goals, risk tolerance, and time horizon. They can also provide valuable insights and market updates to help you make informed investment decisions.

In addition, a financial advisor can act as a behavioral coach to help you avoid common investment pitfalls such as emotional decision-making, short-term thinking, and chasing past performance. They can also provide ongoing support and accountability to help you stay on track with your financial goals.

Of course, it's important to choose a reputable and trustworthy financial advisor who has your best interests in mind. You can research and compare different financial advisors and their fees, credentials, and track record before making a decision.

 

Raja Bhattacharjee

 Email:  investment.junctions@gmail.com

 Phone: 09830146206

 Office: 09681518774   /  7449858289

This blog is purely for educational purposes and not to be treated as personal advice. Mutual funds are subject to market risks, read all scheme-related documents carefully.