Let me start with the usual caveat. I have no clue how long will the bear market last. However I am doing this article for you to learn from history. Let me warn you once more – the greatest learning from History is that we don’t learn from history.

So with these 2 caveats, lets go to the most vicious, and long lasting bear market. The 1929 crash. It lasted 32 months, it ruined lives, businesses were shut down PERMANENTLY, people had no clue what to do. My grandfather kept his job in India and did not even hear about how bad it was !!

Today’s Central Banker – aka FED in the US steps in even before somebody asks for help. I do not think that is a good thing. Just shows that there is a generation that needs pampering.

In India we were hit by many drawdowns like 1992, 2008, 1999…We came back pretty soon, but I guess we should be prepared for 20 months. Why 20 months? Simply because our economy is not in great shape. None of our macros are in good shape. Two friends called to say that they are slowing down their SIP. One was doing 1 million Rs. per month, other was doing 6L per month.

All good things must come to an end – and a bull market ends when a Bear market starts. A 20% fall is called a Bear market and we are now entrenched in that territory. So yes, by definition we are grappling with the bear.

Every year from 2010 till date we have seen drawdowns – maybe 15/17 % and hence we kept calling non bear markets – just a correction. However a graph from 2009 to 2020 shows that they were small drawdowns compared to what has happened now.

Since we have no clue what the bear would do to us – and for how long – let us see what we can do for the next 7 years. Why 7 years? Simply because I believe that is a good amount of time to give for equity anyway. So 7 years. If the market turns around in 5 years, be happy! This is surely not a time to sell all your shares and stop your SIP. In fact if you have extra money start doing a sip for say 3 months – do it as a weekly activity instead of a monthly debit. Do a weekly sip instead of a monthly.

Sounding disappointed?

WEll I hate sip – especially if I knew that it was  going to be a straight bull run..but hey I do not have a crystal ball, so it has to be a sip for all of us

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