Why Do Big Returns in the Nifty 500 Come With Big Falls?
About market cycles
Every major bull phase in equities carries the memory of a previous decline and the seed of a future one.
The Nifty 500 history demonstrates a repeating rhythm of expansion, overheating, correction and rebuilding.
Understanding that rhythm is central to survival as well as wealth creation.
Cycle table
| Period | Move |
|---|---|
| 2002 – 2004 | 141% Rise |
| 2004 – 2006 | 179% Rise |
| 2004 Correction | 29% Fall |
| 2006 – 2008 | 154% Rise |
| 2006 Correction | 33% Fall |
| 2008 – 2009 | 64% Fall |
| 2009 – 2010 | 159% Rise |
| 2011 – 2015 | 104% Rise |
| 2015 – 2016 | 21% Fall |
| 2016 – 2020 | 74% Rise |
| 2020 Crash | 38% Fall |
| 2020 – Till Date | 227% Rise |
What the pattern teaches
Sharp declines appear frightening in isolation.
However when placed inside multi-year cycles, they often act as reset points for the next advance.
Most investors emotionally exit during stress and re-enter after recovery, reversing the mathematics of compounding.
Why rallies plant seeds of correction
As prices rise, leverage, optimism and participation increase.
Expectations stretch faster than earnings.
Eventually the imbalance demands cooling.
Time in market versus timing the market
Missing only a few powerful recovery phases can drastically reduce lifetime returns.
Many of the strongest percentage gains came immediately after painful declines.
Patience therefore becomes a strategy, not a slogan.
👉 Structured participation frameworks such as Nifty Tip help traders navigate such environments.
Risk management reality
Drawdowns are inevitable.
The objective is not to eliminate them, but to survive them with capital and confidence intact.
Diversification, sizing and discipline play decisive roles.
Investor takeaway
Derivative Pro & Nifty Expert Gulshan Khera explains that markets reward those who respect volatility.
Large wealth creation historically required enduring uncomfortable phases.
Preparation beats prediction.
Read more disciplined market perspectives at Indian-Share-Tips.com.
