Zerodha Co-Founder Nikhil Kamath believes investors should not get carried away in a bull market if it lasted longer with low volatility. Sharing his views on Twitter, Kamath said it is it’s more about not losing too much in the bad times and not making the most during the good times.
“Bear markets are significantly more dramatic than bull, if this bull run has lasted longer than usual and vix(volatility index) is at a ridiculously low level, don’t get carried away,” Kamath wrote on Twitter.
“Everything is cyclical, if there’s one thing that doing this every day for 19 years has taught me, it’s more about not losing too much in the bad times and not making the most during the good times,” Kamath wrote.
Kamath quoted an InvestyWise chart which shows the historical performance of the Nifty index. The chart of Nifty’s last two decade’s bull and bear markets shows the bull market that began in 2020 continues, with the index rising about 160 per cent in three years and three months period.
In 2005-06, Nifty surged 170 per cent in two years and was followed by a 30 per cent fall in one month in 2006.
“Bull markets have typically lasted around one year and 10 months on average. However, the most recent four bull markets have exceeded this average, averaging over three years. Bear markets, on the other hand, are comparatively shorter, often concluding within half a year,” the InvestyWise chart, which Kamath shared, said.
“The average gains during a bull market stand at 101 per cent, whereas bear markets tend to see a decline of 33 per cent on average. The shortest bull market lasted just 50 days while the longest one spanned 1,419 days.”
Domestic equity benchmarks the Sensex and the Nifty hit their fresh record highs in July. Sensex jumped to a new peak of 67,619.17 while Nifty registered its new all-time high of 19,991.85 in trade on July 20, 2023.
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Updated: 02 Aug 2023, 03:23 PM IST