Since late September, we’ve seen the Indian stock market go through a correction, with NIFTY falling around 9%. For many, this drop might seem worrying. But experienced investors know that ups and downs are normal in the stock market.
Every year, the market drops by 10–15%, and every three-four years, it usually falls by 20–25%. Every eight-ten years, a bigger drop of 30–40%+ can happen. These corrections are actually healthy. They help adjust stock prices and give serious investors a chance to buy at better prices.
Looking back over the past 16 years, we see a clear pattern: after each big fall, the market has bounced back strongly. For example, in 2020, despite a 38% drop, the market rose by 86% afterwards. Even smaller drops, like in 2016 or 2019, were followed by solid gains. This pattern reminds us that while declines are temporary, recoveries can bring excellent long-term growth for those who wait patiently.
Data compiled by Ms. Niyati Patel at Artham FinoMetry Pvt Ltd. Source: NSE Website, NIFTY 50 Datapoints.
“Investors should see these cycles as part of the journey and not something to fear. Market dips are great chances to build a strong portfolio. History shows that investors who stay calm and keep investing during these times often see higher returns over time.
The rewards come to those who stay calm and disciplined.
The Government of India has introduced changes to the National Savings Scheme (NSS) and Public Provident Fund (PPF), effective from 1st October 2024.
Key Updates:
- National Savings Scheme (NSS):
- NSS will stop paying interest after 1st October 2024.
- Withdrawals made after this date will still be taxed according to the applicable income slab.
2. Public Provident Fund (PPF):
- Multiple PPF Accounts: If you hold multiple PPF accounts, only one will remain active. Balances from other accounts will be merged. If cumulative balance exceeds the annual limit, accounts other than primary account will be refunded without interest.
- PPF for Minors: When a guardian holds both an active PPF account for themselves and another for a minor, the minor’s account will only earn standard savings interest until the child reaches adulthood.
- Non-Resident Indian (NRI) Accounts: NRIs must close their PPF accounts upon maturity, as they cannot be extended. Accounts extended beyond 30th September 2024 will not earn interest.
For unaffected accounts, PPF will continue to earn the prescribed tax-free interest.