Beyond market crashes: Why investing in uncertainty yields better returns

Subscribe to enjoy similar stories. Someone once said, “Investing during a crisis is overrated, while investing during confusing times is underrated." The idea of making a fortune by investing at the bottom of a crisis is often glorified, fostering the belief that wealth is built by timing market downturns with precision. Stories of investors who seized opportunities during market collapses create the illusion that waiting for the next major crisis—and deploying capital at exactly the right moment—is the key to success.

While having cash during a crisis is essential, it is ineffective without the conviction to invest. Read this | These foreign funds have been selling more Indian stocks than the others. They aren’t the ones you thought they were. The saying “Cash combined with courage in a time of crisis is priceless" captures this sentiment, but the reality is more nuanced.

True opportunities do not arise solely in moments of outright collapse. Periods of uncertainty and confusion—when valuations are favourable but sentiment remains weak—often present better investment prospects. Market crises are rare.

Over the past four decades, only five or six major ones have occurred—the market downturn of the 1990s, the Tech Bubble in the early 2000s, the Global Financial Crisis of 2008, and the Covid-led crash in March 2020. Waiting on the sidelines for a perfect crisis can be detrimental to long-term compounding. Timing the exact market bottom or top is impossible—such moments become clear only in hindsight.