Decoding Nifty’s growth story: Here’s what 10 years of market corrections reveal

The Nifty 50 index has seen healthy gains in April 2025, driven by optimism around India’s economic growth, rising corporate earnings, and sustained retail participation in equities. While the long-term trend remains bullish, many investors ask the same question: How long will this rally last?

The concern isn’t new. Every bull run brings with it the anxiety of a potential correction. History shows that corrections are not a matter of "if" but "when."

To understand this and help investors prepare rather than panic, we analysed Nifty’s performance over the last 10 years (March 2015–April 2025). What we found offers clarity and a playbook for navigating volatility with confidence.

How often does the Indian stock market crash?

Over the past decade, Nifty corrected by 10 per cent or more 10 times. That's one major correction every year on average.

However, averages can be misleading, as 2017 saw no significant corrections, while 2018 had two.

The key takeaway is that while corrections are frequent, their timing is unpredictable. Trying to guess next fall may lead to missed opportunities rather than timely exits.

The depth of the drop

The average magnitude across all 10 corrections is 15.1 per cent, ranging from just above 10 per cent to more than 37 per cent. The COVID-19 crash was the most significant outlier. Removing that, the average correction falls to 11–12 per cent, more in line with typical pullbacks.

The key takeaway is that while media headlines may amplify panic, most corrections are modest and temporary.

How long before the correction is over?

The average duration of correction phases was 94 days, or roughly three months. But again, the range is wide, as the 2015 correction lasted 188 days, and the late 2021–early 2022 corrections ended in 49–73 days.

This correction extended over six months, reminding investors that not all drawdowns are short-lived.

So, the key lesson is that staying calm during a three—to six-month dip can lead to long-term gains. Panic selling during this phase can lock in losses instead.

Good times outweigh the bad

Let’s flip the lens. Our analysis found that, on average, the Nifty 50 spent around 274 days per year in positive or stable territory.

Some years were almost entirely bullish; for example, 2017 had no major corrections and delivered strong returns.

While corrections often dominate headlines and stir emotions, the truth is that bullish or stable phases vastly outlast market downturns, both in time and returns.

Over the 10 years analysed (March 2015 to April 2025), the Nifty 50 spent an average of 274 days each year in upward-trending or range-bound phases without any major correction (defined as a drop of 10 per cent or more from recent highs).

That’s nearly three-quarters of the year spent in non-distress market conditions.

What does this mean for investors?

This means that panic sells during corrections are often poorly timed. During these longer upside stretches, most of the market’s compounding happens quietly.

Even in volatile years, the broader market often recovers quickly and continues its upward journey.

For instance, after the COVID-19 crash in early 2020, the Nifty surged by over 70 per cent in the following 12 months, erasing losses and creating new wealth for disciplined investors.

In 2017, which had zero 10 per cent corrections, the Nifty climbed nearly 29 per cent, showing how calm waters often precede some of the best compounding years.

The patience premium

The psychological toll of volatility often causes investors to exit too early. However, as the data shows, if an investor had exited during one of the 10 correction phases over the last decade, they would likely have missed out on the prolonged upside phase that followed each dip.

Patience in equities isn't just a virtue—it's a strategy. Understanding that the market spends three times as many days rising or consolidating as falling helps in:

(i) Detaching emotions from short-term volatility

(ii) Avoiding knee-jerk reactions during drawdowns

(iii) Building wealth through time-tested staying power

Conclusion: The market spends most of its time trending up. Corrections are sharp but short; uptrends are longer and more profitable.

Taking advantage of volatility

Though uncomfortable, market corrections are predictable, cyclical, and often opportunistic. Historical Nifty data shows one significant correction per year, with average drops of 11–15 per cent and a mean duration of 94 days. Understanding this rhythm helps you build a strategy that turns short-term panic into long-term profits.

The case for a tactical cash reserve

Allocating nearly 10 per cent of your portfolio to cash (or low-volatility assets) provides the firepower to buy into weakness. When the Nifty 50 drops by 10 per cent or more:

(i) Don’t rush everything. Use a tranche-based buying approach (for example, invest 25 per cent of the reserve every 3-4 per cent drop) to average into fear.

(ii) Target fundamentally strong stocks or quality stock baskets, which tend to rebound better than speculative names.

Had this strategy been applied during past corrections—like in early 2016, mid-2018, or even the 2022 FII-driven drawdown—investors could have picked up quality at a discount, well ahead of recovery rallies.

Here’s a real-world-style visualisation of a tranche investing strategy during a Nifty correction:

(i) As Nifty falls in stages (−3 per cent, −6 per cent, etc.), the investor deploys 20 per cent of their reserved capital at each stage.

(ii) This approach avoids trying to time the bottom and ensures disciplined averaging during panic phases.

Use duration data to stay emotionally anchored

Knowing that corrections have historically lasted just three months on average gives investors a mental model to wait them out. Just like seasons, corrections pass—and are typically followed by longer, wealth-building uptrends.

It’s not about predicting the bottom—it’s about having a playbook when others freeze.

Navigating 2025 with data

As we move through 2025, the Indian stock market shows a mix of strength and uncertainty. 

The Nifty 50 is rising towards all-time highs, driven by robust domestic inflows, sectoral tailwinds, and resilient earnings. 

Yet, global risks—from elevated US interest rates to geopolitical tensions—make investors jittery. Volatility will likely rise amid earnings announcements.

Don’t confuse volatility with risk

Volatility is the market’s way of resetting expectations. It doesn’t always equal danger. 2025 could deliver a textbook scenario where a mid-year dip sets up for a strong finish, much like 2016 and 2020.

You must be armed with historical context so that you don’t fear a 10–12 per cent correction—you’ll expect it, prepare for it, and act strategically.

You will realise that missing the upside due to inaction is a bigger threat than the short-term downside.

By aligning your investment behaviour with historical market patterns, you avoid chasing tops or capitulating at bottoms, gain confidence in your asset allocation, and, most importantly, treat volatility as a feature, not a flaw, of market cycles.

It’s not about timing the market; it’s about time in the market

Over the past decade, the Nifty 50 has taught us that dips are inevitable, but so are recoveries. 

With this data, long-term investors can stop fearing corrections and use them as strategic entry points. 

If you're building wealth through equities, the real question isn’t when the next dip will come. It’s whether you’ll be ready to take advantage of it.

(Manish Goel, the author of this article, is the founder and MD of Equentis Wealth Advisory Services. Views are personal.)

Disclaimer: This story is for educational purposes only. The views and recommendations above are those of the expert, not Mint. Mint advises investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.