What if you invested just before a crash? Even the worst-timed investments delivered 9–15% return annually

Market crashes are often seen as an investor’s worst nightmare. Sharp declines, grim headlines, and waves of panic selling can rattle even seasoned investors. But history tells a different story — even if you invested right before a crash, patience has often turned bad timing into surprisingly strong long-term gains.

From the 2000 Dotcom Bubble to the 2020 Covid crash, the Nifty 50 Total Return Index (TRI) has faced multiple steep declines — some exceeding 50 percent. The sharpest of them all, the 2008 Global Financial Crisis, saw a drawdown of nearly 59.5 percent.

In the short term, such falls can be painful. However, over the last 25 years, every decline was followed by a recovery and new highs, driven by India’s economic growth and corporate profitability. Even the worst-timed investments delivered equity returns of 9–15 percent annually, comfortably outpacing debt (7–8 percent) and inflation (4–6 percent), as per the latest report of FundsIndia.

Despite a 50.2 percent drop during the 2000 Dotcom Bubble, annualised returns have been 12 percent over more than two decades, turning Rs 1 into nearly 20 times. Similarly, the 29.8 percent dip during the 2004 Indian election uncertainty still translated into 14 percent annual returns, multiplying investments 16.5 times.

Even after a 59.5 percent fall in the 2008 Global Financial Crisis, annualised returns were 9 percent, while the 38.3 percent drop in the 2020 Covid crash has so far been followed by 15 percent annualised returns, more than doubling investments in just a few years. The returns are calculated from each peak till July 31, 2025.

History shows that even with the worst entry points, staying invested through cycles has far outperformed debt instruments and inflation. While investing before a crash demands patience, entering after a crash often accelerates returns — recoveries tend to be swift as economies stabilise, earnings rebound, and sentiment improves.

While equities offer superior long-term returns, pairing them with debt can reduce volatility and help investors ride out the emotional stress of downturns.

Bottom line is whether you invest before or after a crash, wealth creation comes from staying invested. History makes one thing clear that investing in quality assets and holding them over the long-term beats trying to dodge every downturn. Those who can endure short-term pain are often rewarded with long-term gains that outstrip safe but lower-yielding options.