The combination of domestic pressures, including a weakening rupee and persistent foreign outflows, alongside global headwinds such as elevated crude prices and tighter liquidity conditions, has created a challenging environment for Indian equity markets.
You will need to pull your money out of the stock market if you're unable to hold on to your investments due to urgent need for your funds, eg. for family emergencies and retirement purposes. If you need your money back at any time, then its better not to invest or trade the markets.
A stock market crash can be a side effect of a major catastrophic event, economic crisis, or the collapse of a long-term speculative bubble. Reactionary public panic about a stock market crash can also be a major contributor to it, inducing panic selling that depresses prices even further.
When demand for a stock is high (meaning more people want to buy than sell it), the price rises as buyers are willing to pay more. But when supply exceeds demand (meaning more people are selling than buying), the stock price tends to fall, as sellers are forced to lower their prices to attract buyers.
Asset prices dropping in response to robust labor market data is no new phenomenon, occurring across 2022 and 2023 as investors looked for weaker job market data to justify a pivot from the Fed as it hiked interest rates to a two-decade high.
While the 2024-25 earnings growth of Nifty 50 is expected to grow at a modest rate, recovery is expected with the support of healthy domestic GDP growth rate, decline in interest rates and a stable policy framework.
"It sets the stage for continued strength heading into 2025," Bassuk added. For 2024, the Nasdaq surged 28.6%, while the bellwether S&P 500 notched a 23.3% gain, marking the index's best two-year run since 1997-1998. The blue-chip Dow posted a 12.9% advance for the year.
If you're taking a long-term perspective on the stock market and are properly diversifying your portfolio, it's almost always a good time to invest. That's because the market tends to go up over time, and time in the market is more important than timing the market, as the old saying goes.
Market Expert Ruchir Sharma says that the stock market's momentum looks likely to sputter in 2025 and that it could falter as investors grow wary of the US's mounting debt problems.
Exposure to stocks should remain an important part of your allocation target, even in retirement. However, a possible need to access these assets for income in the near term means you are more susceptible to short-term risks.
The most extreme example of the last 100 years was the crash of the 1930s, which took 25 years to get back to its previous high. The S&P 500 took almost six years to fully recover from the crashes of 2000 (the dot-com bubble) and 2008 (the global financial crisis).
The causes underlying market failures include negative externalities, incomplete information, concentrated market power, inefficiencies in production and allocation, and inequality.
Additionally, the rise in global crude oil prices, with Brent crude breaching $81 per barrel, has reignited inflationary concerns, further dampening market sentiment. The global macroeconomic environment, coupled with continued foreign outflows, has made it more challenging for Indian equities to attract investments.
To protect your portfolio, it's wise to keep your money in the market for as long as possible -- ideally, decades. It's impossible to predict how the market will perform in the coming weeks, months, or even years. But historically, it's always managed to earn positive total returns over decades.
To be clear, don't expect Bitcoin's historical returns to be replicated in the future. However, there's reason to believe that there's still plenty of upside potential for long-term holders. My No. 1 reason to remain invested in Bitcoin is its attractiveness as a store of value.
Best Months to Buy or Sell Stocks. Our analysis of S&P 500 data from 2000 to 2024 also revealed some clear monthly patterns. November is historically the strongest month, with an average daily return of 0.107% and positive returns 57% of the time. April and July are the next strongest months.
The sudden drop in stock prices may be influenced by economic conditions, catastrophic event(s), or speculative elements that sweep across the market. Most flash crashes are usually short bursts of market downturns that can last for a single day or much longer to bring investors heavy losses.
The current average is more than 3 standard deviations above its historical mean, signaling an overvalued market. Here is the same chart, this time with the geometric mean and deviations. The latest value of 163% is down from 164% in November and is more than 3SD above its historical mean.
Why is there decline in share market? The market might be falling due to a combination of factors such as economic downturns, geopolitical tensions, and shifts in investor sentiment. Economic indicators like rising inflation, increasing interest rates, or disappointing corporate earnings can trigger sell-offs.
The Dow Jones did not return to its peak close of September 3, 1929, for 25 years, until November 23, 1954.
As shown in the table below, the recovery period for U.S. stocks has been as long as 15 years: In the wake of the 1929 Crash, the IA SBBI US Large Stock Index didn't fully recover until late 1944. For gold bugs, the longest recovery period spanned more than 26 years (from October 1980 until April 2007).