What we can learn from market crashes

TL;DR

During market crashes, Australia's share market has historically experienced a one-third downturn from the peak, but a strong rebound of around 24% after hitting the bottom. The advice is to continue buying if you have cash resources and hold if you are already invested.

Transcript

g'day and welcome to this week's video my name's robert goudie from consortium private wealth from my land room most of our office staff are working from home I've only got two or three at any one time working the office and so if anyone's trying to call through to us we are there we are working as hard as we head as we're well aware these are the ... Read More

Key Insights

• 🧑‍💼 Consortium Private Wealth's office staff are mostly working from home, but they are still dedicated to assisting clients during these challenging times.
• 🙊 Market crashes in Australia typically result in a one-third downturn from the peak, emphasizing the volatility of the market.
• 🍗 It is recommended to learn from past market crashes and not to try to time the market by selling and waiting for better conditions.
• 💩 The average rebound after hitting the bottom of a market crash is around 24% within 12 months, indicating the potential for recovery.
• 🍉 The market's strength and performance should be considered in the context of long-term investment goals, rather than short-term fluctuations.
• 🥹 Holding investments and staying put during market crashes is generally advised to mitigate risks and benefit from potential rebounds.
• 😘 Cash resources can be used to buy during market crashes, taking advantage of lower prices.

Questions & Answers

Q: What is the advice given to clients during market crashes?

The advice is to continue buying if you have cash resources and hold if you are already invested. Timing the market by selling and waiting for it to improve is risky.

Q: How much does the share market usually go down during market crashes?

On average, the share market in Australia experiences about a one-third downturn from the peak during market crashes. However, some crashes have seen an overshoot to over 50%.

Q: When can we expect a rebound after hitting the bottom of a market crash?

The average rebound after hitting the bottom is around 24% after 12 months. This suggests that holding investments and not trying to time the market is a more successful strategy.

Q: How long does it take for the market to recover after hitting the bottom?

The market typically takes about three years to recover after hitting the bottom. On average, the rebound reaches around 55% during this time.

Summary & Key Takeaways

• Most office staff at Consortium Private Wealth are currently working from home, but they are available and working hard to assist clients during these tough times.

• The video discusses previous market crashes in Australia and the average results during those periods. It emphasizes the importance of buying if you have cash resources and holding if you are already invested.

• The average downturn during market crashes is about one-third from the peak, and the average rebound 12 months after hitting the bottom is around 24%.