My best answer to both the questions is the same: The market will go up or go down from here, I do not know.

There are 3 answers that you can get at this stage: “The market was too high anyway, look at the PE ratio, so the market has gone down. This is the start of a much bigger fall, and you should stay away from the market”

“This is a fantastic opportunity to buy – see the market is down from its highs”.

The third view is “I have spent 10/20/30 years in the market and I realize that I have no clue about what the market will do”.

Sadly the 3rd category view holder is not wanted on Television or even in the print media. Just too boring and have no view. I am in the 3rd category. The first 2 category people are guessing.

How much has the market gone down? well not much. Can it go down further? Sure a 20% fall from 36000 will take it to 27000. Not impossible. If the markets start discounting a UPA3 government in 2019, markets could fall from here, surely.

Somebody asked my wife on wassup “Is this a good time to buy”. I have no clue about them, what do they earn, are they retired..how does one really expect to reply to such questions? I said “I have been buying as well as selling – do the same”.

If the Dow Jones is down, will the Sensex go down?

If the market goes down to say 27000, when will it recover to 37000?

So when should we start buying?

I actually cannot answer any of this. It took the market 25 years to recover from the lows of 1929. It scarred 2 generations of investors. It took almost 7 years for Indian markets to recover from the Harshad scam. Many retirement funds and corpus got cleaned up in that period. Many never recovered. The 2008 fall and the 2009 rise were sharp – like a V. From 2009 to 2018 you did not see a great pull back. This could be a pull back or the start of another big fall.

If you are retiree AND you are selling your equity portfolio (swp from an equity fund) it might take a much longer time to recover. Or worse, if you are drawing more, it may not recover at all. The fall in India has not been much – yes there could be more fall – but it is also possible that it may not fall. We are all just guessing.

People who say that they have stood earlier falls have to remember a few things. 2008/9 was easy to handle – the recovery was V shaped. Also if it is a person who stood the 1993 fall ask him is age. I was 31 years of age. A career broker, but with my whole earning life ahead of me. In 2009, the recovery started fast. In 1929 depression of the US the market fell more than 50% and it took more than a decade to recover even partially. Each one was different.

So answer honestly: Do you have enough money to last another 5 years? if the answer is yes, you are reasonably well prepared to stay peaceful during the fall and during the recovery!! Assuming that there is a fall and a recovery of course.

I am just guessing. I don’t have a crystal ball like some of my friends seem to have…