Remember the crazy month of March 2020? When at one point the index was down almost 40% in a month? And markets made a multi-year low during the month. Things have changed a lot since then. And how so!
Here are the March lows for both Nifty and Sensex:
- Nifty50 (Closing Low): 7610 on 23rd March 2020
- Nifty50 (Intra-Day Low): 7511 on 24th March 2020
- Sensex (Closing Low): 25981 on 23rd March 2020
- Sensex (Intra-Day Low): 25638 on 24th March 2020
It hasn’t been a very long since then, but surprisingly, markets have unexpectedly recovered very sharply. Have a look at the move (up to 8th Feb 2021) since March 2020:
- Nifty50 is Up 98.6% (at 15,115.8) since the closing low of 7610 on 23rd March 2020
- Nifty50 is Up 101.2% (at 15,115.8) since the intra-day low of 7511 on 24th March 2020
- Sensex is Up 97.6% (at 51348.7) since the closing low of 25981 on 23rd March 2020
- Sensex is Up 100.3% (at 51348.7) since the intra-day low of 25638 on 24th March 2020
Note – This is as per the closing index data for 8th February 2021.
So to put it very simply, the indices have doubled the money in a matter of months. This pace is rare. at least at the overall index level. And the 100% up move (or doubling of money) has happened in just 221 trading sessions. Not bad at all when everyone was expecting markets will take some time to come back up in the aftermath of the pandemic. Market did surprise us all no doubt.
So if someone had the guts* to invest lumpsum even in plain and simple Sensex or Nifty index funds during March lows, the money would have doubled till now.
* Why guts? Remember 3 Cs of Cash, Courage and Crisis!
I think this might not be the fastest doubling of the Indian index till now but nevertheless, it has been pretty fast given the size our economy now.
To be frank, 2020 was a crazy year. On many fronts. Even if you look at the annual nifty returns data, you will see that simple annual returns don’t tell everything about 2020. It was such a volatile year!
Mr. Dev, I will be grateful if you come out with an article on Segregated funds . I am holding in Dynamic Bond fund wherein I have allotted equal units in segregated funds. Now I have received some part proceeds but in turn units are not reduced. why, please explain. I tried to get help from Mutual fund house but in vain.