Market Correction Impact Calculator
Simulate a market crash during your SIP tenure and see the long-term impact
Configure Simulation
Normal vs Corrected Portfolio
30% correction in Year 5 with 2-year recovery
Final Value Breakdown
Retained value vs impact of the correction
Correction Severity Analysis
Impact at different correction magnitudes (in Year 5)
| Correction | Final Value | Impact | % Impact |
|---|---|---|---|
| 10% drop | ₹94.97 L | -₹4.95 L | -4.9% |
| 20% drop | ₹90.02 L | -₹9.89 L | -9.9% |
| 30% drop | ₹85.08 L | -₹14.84 L | -14.8% |
| 40% drop | ₹80.13 L | -₹19.78 L | -19.8% |
| 50% drop | ₹75.19 L | -₹24.73 L | -24.7% |
SIP Advantage During Corrections
When markets fall, SIP investors actually benefit by buying more units at lower prices (rupee cost averaging). While the short-term portfolio value drops, the lower NAV means your future SIPs accumulate more units. Over the long term, SIP investors who stay disciplined during corrections often outperform those who stop their SIPs in panic. The key is to continue investing and let compounding do its work.
Year-by-Year Comparison
Normal vs corrected portfolio each year
| Year | Invested | Normal | With Correction | Gap |
|---|---|---|---|---|
| Year 1 | ₹1.20 L | ₹1.28 L | ₹1.28 L | +₹0 |
| Year 2 | ₹2.40 L | ₹2.72 L | ₹2.72 L | +₹0 |
| Year 3 | ₹3.60 L | ₹4.35 L | ₹4.35 L | +₹0 |
| Year 4 | ₹4.80 L | ₹6.18 L | ₹6.18 L | +₹0 |
| Year 5CRASH | ₹6.00 L | ₹8.25 L | ₹5.77 L | -₹2.47 L |
| Year 6 | ₹7.20 L | ₹10.58 L | ₹7.79 L | -₹2.79 L |
| Year 7 | ₹8.40 L | ₹13.20 L | ₹10.06 L | -₹3.14 L |
| Year 8 | ₹9.60 L | ₹16.15 L | ₹12.61 L | -₹3.54 L |
| Year 9 | ₹10.80 L | ₹19.48 L | ₹15.49 L | -₹3.99 L |
| Year 10 | ₹12.00 L | ₹23.23 L | ₹18.74 L | -₹4.50 L |
| Year 11 | ₹13.20 L | ₹27.46 L | ₹22.40 L | -₹5.07 L |
| Year 12 | ₹14.40 L | ₹32.23 L | ₹26.52 L | -₹5.71 L |
| Year 13 | ₹15.60 L | ₹37.59 L | ₹31.16 L | -₹6.43 L |
| Year 14 | ₹16.80 L | ₹43.64 L | ₹36.39 L | -₹7.25 L |
| Year 15 | ₹18.00 L | ₹50.46 L | ₹42.29 L | -₹8.17 L |
| Year 16 | ₹19.20 L | ₹58.14 L | ₹48.93 L | -₹9.20 L |
| Year 17 | ₹20.40 L | ₹66.79 L | ₹56.42 L | -₹10.37 L |
| Year 18 | ₹21.60 L | ₹76.54 L | ₹64.86 L | -₹11.69 L |
| Year 19 | ₹22.80 L | ₹87.53 L | ₹74.37 L | -₹13.17 L |
| Year 20 | ₹24.00 L | ₹99.91 L | ₹85.08 L | -₹14.84 L |
Calculator results are for illustration purposes only. Actual returns may vary based on market conditions, fund performance, and other factors. Mutual fund investments are subject to market risks. Read all scheme-related documents carefully before investing. Past performance does not guarantee future returns.
What a market crash does to a portfolio — and the maths of recovery
A market fall hurts more on the way back than it looks on the way down, because recovering a loss needs a larger percentage gain than the loss itself: a 20% fall needs a 25% rise to break even, and a 50% fall needs a 100% rise. Understanding that asymmetry is what stops panic-selling at the bottom, which locks the loss in permanently.
This calculator models a correction of a given size on your portfolio and shows the gain needed to recover and how time in the market tends to heal it. History is clear that markets have recovered from every past crash given enough time — the investors who were hurt permanently were usually the ones who sold during the fall.
How this calculator works
- 1Enter your portfolio value and a hypothetical market-fall percentage.
- 2The calculator shows the post-fall value and the percentage gain required to recover.
- 3It illustrates how continuing to invest through the fall lowers your average cost.
Frequently asked questions
How much does a portfolio need to rise to recover from a crash?
More than it fell, because gains are calculated on a smaller base. A 20% fall needs a 25% rise to break even, a 33% fall needs a 50% rise, and a 50% fall needs a 100% rise. This asymmetry is why avoiding deep, permanent losses — by not selling at the bottom — matters so much.
Should I sell during a market correction?
Selling during a fall converts a temporary, on-paper loss into a permanent one and means you miss the recovery. If the money is genuinely long-term, staying invested — and continuing a SIP, which buys more units cheaply — has historically been the better course. Money you need within a couple of years should not have been in equity to begin with.
Do markets always recover from crashes?
Broad, diversified equity markets have recovered from every major crash in history given enough time, though the wait has sometimes been years and no recovery is guaranteed on any fixed schedule. This is why matching your equity money to a long horizon, and keeping short-term needs out of it, is the core discipline.
Illustrative only. Mutual fund investments are subject to market risks; past recoveries do not guarantee future ones.
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