What was my advice when stock market crashed in 2020?

What was my advice when stock market crashed in 2020? Recently I was going through past email interactions of a client and found a year-old email that I wrote to all my active clients during the Feb – April 2020 market crash. Hence, thought to share with you all.

I wrote this email on 28th February 2020. The market was on free fall during this period and after this period too. On 24th January 2020, the Nifty level was at 12,248 and after that, the fall started and when I wrote an email to all my clients on 28th February 2020, the Nifty level was at 11,201 (down by almost around 1,000+points).

What was my advice when equity stock crashed in 2020?

After 28th February 2020, the market does not bounce back. In fact, it went down further to the level of 8083 on 3rd April 2020. Hence, from the level of 12,248 in Jan to the level of 8083 by 3rd April means almost 34% down. This obviously will devastate the morale of any investors (especially if they are fresh).

Even when I was writing an email on 28th February 2020, I was unaware that it goes to that level of around 8,083. However, controlling my client’s behavior during such hard times is a great challenge and this is where the role of planner comes into picture.

Let me share that email with all of you.

Including me, none were aware that market crash so harsly during last year. In fact, none were aware that it will come back so fastly. However, I have a strong belief that if we control our behavior during such volatile period and concentrate on long term views with proper asset allocation strategies, then it works wonders.

During your decades of equity investment journey, you may face so many yearly budgets, elections, RBI policies, Corona kind of once in a centurty events or financial scams. However, history taught us the lesson that those who manage thier behavior are the winners.

Validating my above statement, I will share two classic examples of my clients in my next post where one who kept silent and another who in a panic took wrong decisions.