Why Is the Market So Crazy? A Simple Guide to What’s Happened from 2019 to 2024

Why Does the Market Feel So Unpredictable?

Over the last few years, the stock market has felt like a roller coaster ride. One moment it’s up, the next moment it’s crashing down. If you’ve been wondering why the markets are so crazy between 2019 and 2024, you’re not alone. From the COVID-19 pandemic to inflation, changing habits, and rising interest rates, a lot has happened that has made the economy and markets seem unstable.

In this blog, let’s break down what caused this chaos and why things still feel a bit uncertain. Whether you’re an investor, a business owner, or just someone curious about the economy, this will help you understand what’s going on.

The 2020 Shock – When Everything Stopped

COVID-19 Chaos: A Sudden Halt

In early 2020, the world faced something we’d never experienced before: a global pandemic. Countries went into lockdown, businesses shut down, people stayed at home, and everything came to a standstill. This caused massive disruptions in the economy. In India, we saw markets crash, unemployment rise, and businesses struggle to survive.

Stimulus Money: Governments Save the Day

To prevent the economy from collapsing, governments around the world—including India—pumped in huge amounts of money to keep things going. In India, the government announced relief packages for people, small businesses, and farmers. The Reserve Bank of India (RBI) also lowered interest rates to make it cheaper to borrow money. This led to a recovery in the stock market, but was it real growth or just a temporary fix?

Why Things Are Still Shaky – The Aftereffects

Inflation Skyrockets (2021–2023)

Once the lockdowns were lifted and the world started reopening, there was a huge surge in demand for goods and services. But the problem was, supply couldn’t catch up. In India, we saw prices of essential items like vegetables, fuel, and even everyday goods rise rapidly. This is called inflation.

The reasons behind this inflation were many:

• Supply chain disruptions: Due to COVID, factories and shipping routes were delayed, making goods harder to find.
• Rising global prices: Global supply shortages and increased energy costs pushed up prices everywhere.
• Labour shortages: In India, many migrant workers had left cities and weren’t able to return, causing a shortage of workers in various industries.

Global Tension and Geopolitical Crisis (2022–2024)

In addition to the economic effects of the pandemic, global tensions like the Russia-Ukraine war and rising energy prices hit markets hard. India, being dependent on oil imports, felt the pinch of rising fuel prices. Geopolitical tensions led to uncertainty in the markets, and investors started becoming cautious.

Interest Rates Rise: Borrowing Gets Expensive

To control inflation, central banks like the RBI started raising interest rates. This means it became more expensive for people and businesses to borrow money. When borrowing costs go up, people spend less, and businesses slow down. This often leads to lower stock prices, and the market reacts nervously. For many, this was a sign that the economy was cooling off.

Why the Market is Still Unstable – What’s Changing?

New Habits, New Markets

The pandemic changed a lot about how people live and work. Many people started working from home, and businesses became more dependent on digital technology. In India, this led to a boom in sectors like e-commerce, technology, and online services. People started shopping more online, using apps for banking, and even attending virtual classes and meetings.

The shift to digital living is here to stay, and it’s changing how businesses operate. However, this also means that older industries, like retail and manufacturing, face tougher competition. So, markets are adjusting to these new realities.

New Global Players: China, AI, and Tech

Another big change is the rise of new global players, especially China. China has become an economic powerhouse, and its influence on global trade is huge. In addition, technology like artificial intelligence (AI) and automation is quickly changing how businesses operate, leading to growth in certain sectors while disrupting others.

In India, we’re seeing more companies adopting AI, digital technologies, and automation. This means more opportunities, but also challenges as traditional industries might struggle to keep up.

Uncertainty Is Here to Stay

With inflation, changing interest rates, and global tensions, it seems like uncertainty is the new normal. The market will likely keep being volatile, and this can be scary for investors who want stability. But, this is a sign of how interconnected and unpredictable the global economy is. Even in India, we’re not isolated from what’s happening around the world.

What to Expect in the Future

So, where does all of this leave us? The market is still on a roller coaster, and it’s hard to predict exactly what will happen next. But here’s the key takeaway: uncertainty is a part of life, especially in the world of markets.

If you’re an investor, here’s a simple piece of advice:

• Think long-term: The market may be unpredictable in the short term, but over time, things tend to stabilize. Don’t panic when things go down, and try not to chase quick profits.
• Stay informed: Keep an eye on the big picture—what’s happening with inflation, interest rates, and global tensions.
• Diversify your investments: Spread your investments across different sectors to protect yourself from big losses in case one area crashes.

The future might seem uncertain, but with a little patience and smart planning, you can navigate the bumpy ride.

What do you think about the market’s ups and downs? Do you have any tips for managing the uncertainty? Let us know in the comments below. And don’t forget to subscribe for more insights on making sense of the market and planning for the future!