From the Executive Editor

We have consciously done stories that would leave you with actionable takeaways. Today, we know that we are on the right track.

We think that this magazine is serving its original purpose. When we launched over two years ago, we decided that we needed to help our readers take intelligent decisions. So, we consciously did stories that would leave you with actionable takeaways. Today, we know that we are on the right track. The reason: more than 50% of the people who participated in this issue's online survey felt that the current bull rally - when the Sensex has zoomed by over 25% - is not a sustainable one. They understand that this is one of the commonly witnessed bull spikes that you see in any bear phase.

In fact, the data section in this issue proves that such short-term rallies have been an integral part of all the previous bear phases—both in the US and India—during the past two decades. While the upturns in the US market were few, they were quite significant. For example, in October-November 2008, the Dow Jones went up by nearly 18% within a few days, even as the index shed over 40% after October 2007. Similarly, in July 2002, it was up by more than 13% in just over a week while losing over 35% between May 2001 and October 2002.

In India, though, the bullish spikes have been more common. In 1997-98, the Sensex gained over 24% within a few months, even as the overall loss during the 17-month period was over 37%. In fact, the index nearly reached the peak from where the bear period started. In the past four bear phases, the Indian markets have consistently gained over 20% in short bursts. Therefore, what you have seen in the past few weeks may not be the beginning of another bull run, but only additional evidence to prove that we are surely in a bear phase. So, don't get fooled by it.

As an investor, therefore, you need to decide whether you are in the market for the short run or for a longer innings. If it's the former, take advantage of these shortterm rallies by acting more like a trader - and earn returns of 5-10% at regular intervals. But, if it is the latter, invest at all the lows and wait for a couple of years to reap the profits. The truth is that the next bullish phase is around the corner. At this stage, we don't know which corner. But it should come, and within 12 months.