The Ultimate Market Irony

Amar Pandit , CFA , CFP

Morgan Housel wrote these powerful words, “Remember the ultimate market irony: All past market declines look like opportunities; all future (and current) market declines look like risks.

In 2020, it seemed like the world was coming to an end. The stock market reacted violently with the fastest crash in just a few weeks. Everything looked like a risk.

We all know what happened. In hindsight, the 2020 stock market correction (like all previous corrections and crashes) looked like a huge opportunity.

Similarly, the current decline is nothing but an opportunity but as always it looks like a risk.

The Sensex and Nifty stock market indexes were down 5% yesterday. Today, they are up 2.5% (as I am writing this). Who knows where they will head next? We might again go down next week.

The point is no one knows when this decline will stop or how (and when) the current war will end. But the decline will stop at some point of time and the war will end too. When it does, this period (or 2022) will certainly look like an opportunity.

What are you seeing this market decline as?