Jun 20, 2019

BSE SmallCap India Analysis. How Long a Bear Market can Last?

I once listened on TV Channel that bear market last for only 1 or 1 and half year max. That time more than one year has passed. I thought may be bear market will die soon and If Not then its days are numbered.

Google Finance showing S&P BSE SmallCap index from Apr 2003. I checked how long correction in this index stayed.

Here are two corrections (Only long and big corrections):

1. Jan 2008 - Mar 2009: 1 year 2 months
2. Oct 2010 - July 2013: 2 years and 10 months
3. Jan 2018 - ? : 1 year and 6 months has passed. If this is the end? Only time will tell.

BSE SmallCap and BSE MidCap go together as we can see in this chart. 

BSE SmallCap and Midcap from 2003
In this chart, you can also see the data I have given. The data is roughly taken from the chart itself. So, broader market correction can last longer than 1 and half year and no need to find cushion in this idea. In next bear market, you know you should sell if you sense long bear market. Earlier you sell, more money you save and that is like earned money. If you can deploy one bull market money in next bull market then you can earn wealth ELSE just work without pay.

Most of the Retail Investors invest in SmallCap or MidCap. So, thinking only about 30 stocks (Sensex) or Nifty 50 is no use. Broader market earns us money. Even to biggies, broader market earn money. Only rarest of rare may be investing only in Sensex Index or Nifty ETF.