Greatest Stock Market Crashes In the last Decade:

By | November 24, 2015

The following table gives you the big picture of how the market crashes during the last decade.

Markets        Date                P/E        P/B      Div.Yield     Nifty Index     % of Drop

Peak               11-Feb-00      28.47      5.11      0.90               1756                  30.29
Bottom          23-May-00    18.40      3.45      1.91                1224

Peak              12-Feb-01       22.73      4.71       1.08              1400                  26.78
Bottom         12-Apr-01       14.73       3.30      0.94             1025

Peak               2-Apr-04        21.53      3.64      1.70              1841                  24.60
Bottom          17-May-04     12.87       2.74     2.64              1388

Peak               21-Apr-06      21.01      5.41       1.26              3573                  26.33
Bottom          14-Jun-06      14.92      3.79      1.83              2632

Peak               8-Jan-08       28.29      6.55      0.82             6288                  29.25
Bottom          22-Jan-08     20.96      5.10      1.05              4449

Peak               11-Aug-08     19.49       4.25      1.20              4620                  45.36
Bottom           27-Oct-08    10.68       2.12      2.24               2524
Few Points we can learn and under stand from the great falls are:

Stock Market Crashes are inevitable: Stock Market crashes are   inevitable. Nobody can avoid the corrections and no one can  escape from the corrections by simply investing stocks.

Never commit 100 % of funds: Never commit 100% of the funds any point of time in the stock market. Always be prepared for opportunity (crash or correction) and also be prepared ready with cash in hand. At some point of time when market ends its fall you can start accumulating quality stocks at best valuations.

Buy Low Sell High: One has to under stand that market crashes can be used for accumulating stocks at cheaper prices. To achieve this market mantra “Buy low sell high” one has to be knowledgeable (He/she must know market dynamics or how the market works before investing his funds) patient and quick to seize the opportunity. Sir Claude Maxwell MacDonald British Diplomat once said Opportunity is a bird that never perches.”

Always check index PE ratio before investing Funds: Always remember there is a market risk involved for the money committed with stock markets. You may be best in picking stocks in the market , your skills are wasted when you put money in over heated condition. The index PE above 20 to be considered as over heated situation, at most caution to be taken to avoid new commitments with markets.

Don’t jump too quickly: Be patient during the crash time and wait for the dust to settle completely. Please do not take chances to invest funds during correction time. The above table tells you corrections usually last at least 3 months to 6 months period and you enough time to react and make decisions.

 No Charity Program from Govt: Government is there to earn money every day from the stock markets by charging Service Tax, Securities transaction Tax, Education Cess and stamp duty. There is no charity program available currently from the Governments any where from world for who lost their money in the stock markets, hence be prepared and manage the market crash with your own skills.