Stock market crash! Why should retail investors keep some ‘dry powder’ ready?

Nifty 50 is down nearly 18% from its all-time highs of 18,600 seen last year in October. And most of this downturn has happened within this year.

 Technically, the markets have been down for more than 8 months now. So, we’re just 2% away from officially being declared to be in bear markets.

e celebrated US investor, Jim Rogers, complicated the matters recently by declaring that this market will be the worst bear market of his entire life-time.

 A well-known Indian economist went a step further saying that the US is not moving towards recession – it is already in recession!

On the other hand, Indian markets haven’t fallen as badly as the global markets – US Nasdaq 100,

the bellwether of tech stocks worldwide, is down 34% from its highs of Nov 2021 and the broad-based S&P500 is down by 22%.

 Indian markets are withstanding the shocks of inflation, commodities, oil and everything else much better.

What do you, as a retail investor who has been listening to all these voices, do now?

 Is the market about to get worse or is the market about to go up and you are likely to miss the bus once again if you wait and the markets gallop ahead?

Let us first see why did the markets correct after one of the biggest bull markets of all times?

Receding Covid opened up the world but the supply-side dynamics are taking their own time to catch up.

Economies are awash with cash pumped in by the central banks and Oil politics is in full bloom with the Russia-Ukraine war not making the things any easier.

The scenario is ideally poised for an inflation bloom, which is now everywhere that you can see.

 The US just saw its highest inflation rate in the past 40 years and no economy is untouched by the Growth Vs QT (Quantitative Tightening) dilemma.

 As the central banks around the world struggle to rope in inflation and save their economies and population from its effects,

companies will face difficulties in growing and reporting decent numbers. This is what is roiling the stock markets.

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