Here is a sweet and short checklist to how to think about market crashes.
1. Everyone is going to tell you different things. Everyone’s experience is colored by how long they have been in the market. The young investors only seen a 2% fall in 1-day period and they called this a crash. The experience folks saw days of 5-6% fall in the index price in 1 day.
Don’t trust their definition. Be quantitative.
Most of the time the definition people gave matter less.
2. Price falls feels like the start of a large crash or just a small correction or just a blip. The truth is that whether it is a one-day big price fall, a 5-day big price fall, or a 1-month big price fall, this might be
At the start of a very poor yearThe end of a significant correctionJust a blipMarkets are
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