Invested right before market crash? History says you will still make money

Missing just a few of the best days can drastically reduce your wealth, proving that staying invested is key.

It’s the nightmare scenario for any investor: putting your money into the stock market just before it crashes. But what if you were told  that even the worst-timed investments in Indian equities have turned out surprisingly well — if you simply stayed invested?

 

New research by FundsIndia, using data from Ace MF, reveals that even those who invested at the very peak before major crashes in the last 25 years have seen solid returns over time — often beating debt and inflation comfortably.

 

Let’s take the Dotcom Bubble of 2000. The Nifty 50 TRI fell a whopping 50.2% from its peak. But an investor who remained patient from that peak until March 2025 still earned a 12% annualized return, growing their investment 18.8x over 25 years — far outpacing inflation and debt returns.

 

Here’s how other major market crashes performed over the long run: 

  Even if you invested right before a market crash, over long time frames the returns have still turned out to be decent. 

Why Timing the Market Doesn't Work

A Rs.10 lakh investment in Nifty 50 TRI from 2005 to 2025 would’ve grown to Rs.1.43 crore. But if you missed the 10 best days? Your wealth would have been halved to Rs.67 lakh. 

 

Here’s what’s more surprising: 7 of the top 10 best days in the last 20 years came within two weeks of the worst 10 days — highlighting how recoveries often begin during crashes.

 

For example, after the Covid-19 market bottomed on March 23, 2020, the second-best market day followed almost immediately on April 7, 2020, delivering an 8.8% gain.

 

Best Days Are Born in Chaos

From the 2008 financial crisis to the pandemic panic of 2020, some of the strongest equity rallies occurred when fear dominated headlines:

 

2008 Financial Crisis: 22 of the top 30 best days since 2005 happened during this crash.

 

2020 Covid Crash: 4 of the top 30 best days occurred between March and April 2020.

 

2006 Rate Hike Crash: 3 of the top 30 days appeared amidst this turmoil.  Many of the best days occur in the middle of a market crash 

 

Key takeaway: Trying to "wait for things to settle" can cost you dearly.  All Time Highs are a natural part of any growing asset class and not something to be feared 

  All Time Highs automatically don’t imply a market fall. The average 1Y returns when invested in Nifty 50 TRI during an all-time high, is 14% 

 

  Buy & Hold’ vs ‘Profit Booking’: Who Wins Over 10 Years? When comparing investment strategies over a 10-year period, ‘Buy & Hold’ — where you invest once and stay invested — has consistently outperformed ‘Profit Booking’ strategies, where investors try to time the market by selling at highs and re-entering after corrections.  ‘Buy & Hold’ Annualized Return: This is the average yearly return an investor earns by simply holding their investments without reacting to market ups and downs.  Annualized Outperformance: This refers to how much better ‘Buy & Hold’ has performed each year compared to active strategies involving frequent buying and selling. Why it works: Most of the market’s best days often come right after the worst days — meaning if you sell and try to re-enter later, you risk missing big rebounds. Timing the market is nearly impossible to do consistently, and missing just a few of the best days can significantly hurt your long-term returns.