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The market is crashing — what to do and how to handle it — a complete guide.
Published by The Retail Trader · AUG 04, 2026 · Features
The market is crashing — what to do and how to handle it — a complete guide.
First of all: Breathe. A market crash is temporary. In history, every crash has been followed by a recovery.
Keep these three points in mind:
• 2008 — Fall: -60%, Recovery Time: 2 years
• 2020 (COVID) — Fall: -40%, Recovery Time: 6 months
• 2022 — Fall: -15%, Recovery Time: 3 months
Step 2: Review Your Portfolio:
• Have the fundamentals changed? No → Hold
• Is the company going bankrupt? Yes → Exit
• Is it only market sentiment? → Hold, it will recover
Don't stop your SIP. Low prices = more units = faster recovery + more wealth.
Keep these three points in mind:
• ₹10,000 SIP in normal market: 50 units
• ₹10,000 SIP in crash (price half): 100 units
• You get more units in a crash → more profit in the recovery
"Be fearful when others are greedy, greedy when others are fearful." — Warren Buffett
Keep these three points in mind:
• 10-20% correction → Small buying
• 20-30% correction → Moderate buying
• 30%+ correction → Aggressive buying
Equity has fallen → your portfolio allocation has changed. Rebalance by buying equity.
"Sell everything!" — The biggest mistake. If you sell at the bottom, you will miss the recovery.
If you look at your portfolio daily, panic will grow. A monthly check is enough.
"I'm stopping my SIP, the market has fallen" — WRONG. SIP is most valuable at low prices.
"I'll take a loan and buy" — NEVER. If the market falls further, you have both the loan and the loss.
"I'll buy more of whatever is at a loss in my portfolio" — Only average fundamentally strong stocks.
Keep these six points in mind:
• 2008 Global Crisis — Nifty Fall: -60%, Recovery: 2 years
• 2015 China Crisis — Nifty Fall: -15%, Recovery: 6 months
• 2016 Demonetization — Nifty Fall: -6%, Recovery: 1 month
• 2018 IL&FS Crisis — Nifty Fall: -15%, Recovery: 8 months
• 2020 COVID — Nifty Fall: -40%, Recovery: 6 months
• 2022 Rate Hikes — Nifty Fall: -15%, Recovery: 3 months
Every crash recovered. Every single one.
Keep these points in mind:
• 📌 WHAT TO DO IN A MARKET CRASH
• DO:
• ✅ Don't panic
• ✅ Continue your SIP
• ✅ Buy with extra cash (averaging)
• ✅ Rebalance
• ✅ Check fundamentals
• DON'T:
• ❌ Panic selling
• ❌ Checking portfolio daily
• ❌ Stopping your SIP
• ❌ Borrowing to buy
• ❌ Averaging bad stocks
• HISTORICAL:
• 📊 2008: -60%, recovered in 2 years
• 📊 2020: -40%, recovered in 6 months
• 📊 Every crash recovered. Every single one.
• WARREN BUFFETT:
• 📊 "Be fearful when others are greedy,
• greedy when others are fearful."
Keep these points in mind:
• Risk Management | SIP vs Lump Sum | Bear Market Guide
The Retail Trader — educational market analysis. Not investment advice.
This article is for educational purposes only — it is not a buy or sell recommendation, makes no claim of guaranteed returns, and is not advisory in any way. Rules, rates and mechanics change from time to time at the exchanges, SEBI and the RBI, so verify every number yourself with your broker or an official source.