I haven’t seen a fall as brutal and sharp as the present one. I did a back testing for last 20 years. A fall as swift and as deep in a very short time frame like the present one has never occurred. From the year 2000 to present day, 2020, the markets have corrected deeply ten times in the last 20 years, but we have fallen by 37% between 19 Feb 2020 to 23 Mar 2020. In 22 trading sessions we were back to 21 Nov 2016 levels. So four years of compounding vanished in 22 days. This is what Nassim Taleb, of whom I am an unabashed fan has been propagating through his seminal books — Fooled by Randomness, Skin in the Game and Anti Fragile. Uncertainty and Risk go hand in hand. Good societies, people and investments cater for the unknown and uncertain and grow stronger post the aftermath. So they not only survive, but come out stronger.
So the lesson learnt is that only Anti-fragile portfolios will give returns. Secondly, hedging or insurance should be done in volatile markets. What should you do? Just keep some cash for your 6 month household requirements. NEED MONEY. Balance, invest. And forget for 5 to 10 years. There will be a dip. Or there could be a dip. But the economy will revive after 12-15 months. 15 months is a blip in a 120 month horizon or a longer horizon. Stay safe, use distancing and keep investing.