
# What is the Market crash ?

A stock market crash is when stock prices suddenly fall as a result of speculative bubbles and the economy. The stock market is supported by factors such a protracted period of rising stock prices, excessive economic optimism, price-earnings ratios that are higher than long-term norms, as well as the exploitation of marginal debt and leverage by market players. In order to reduce their losses caused by the falling value of the equities, shareholders begin to sell off their shares.

# How does it influence the pension fund ?

Even indirectly, stock market changes impact everyone with a pension scheme or investment trust. A sharp and sustained decline in stock prices might have an effect on the value of several pension funds, which invest a significant portion of their assets in equities. This also suggests that future rewards will be less. Additionally, households' pension income will be reduced, which will discourage people from spending and encourage them to increase their savings.

# How does a market crash affect the economy ?

The economy suffers when market prices decline for an extended period of time consistently, sometimes referred to as a "bear market." People frequently feel panicked while reading news headlines about dropping stock prices and are gloomy about the state of the economy. As fewer investors are entering the market and more people choose to invest in reduced products, the situation of the economy continues to deteriorate. Because of the depression in the stock market, people look for other assets to invest their money in such as bonds or gold. They often provide a better return on investment than shares in the stock market.

# Ways to protect your portfolio from a market crash

1. Diversification - Your portfolio's risk should be decreased through diversification. Investments should consist of a combination of debt and equity (risk-based, non-guaranteed but high returns) to assure rates of return and security (moderate returns but lesser risk). Age has a significant impact on your portfolio's debt-to-equity ratio. To be protected in times of financial emergency, it is also crucial to invest in life insurance and health insurance services
2. Be an Active Investor.- You can understand better market fluctuations and their uncertainty by being an active investor. Active investing, as compared to passive making investments, necessitates monitoring the market's behaviour.
3. Unit Linked Insurance Plans - ULIPs are a worthwhile financial choice to explore. ULIPs are financial products that combine investing and insurance advantages. Since each of these channels invest in similar varieties of financial securities, they are comparable to mutual funds (equity and debt).
4. Don’t Panic Sell - The stock markets see a sharp decline whenever the market crashes. The majority of investors become terrified as a result and rush to leave the market. They quickly sell one‘s assets to stop much farther losses. Investors will realise that anytime the market declines, it also recovers if they can learn to manage their adrenaline surge and pause long enough to think things through.
5. Emergency Fund - To prepare for unforeseen circumstances like illness and unpaid loans, set up an emergency fund well in advance. A decent emergency fund number, according to financial experts, is 5–6 times your monthly salary.
   In an emergency savings, 0% interest is acceptable. You ought to adhere to it.
   Only during a crisis should you utilise this cash.

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A stock market crash is when stock prices suddenly fall as a result of speculative bubbles and the economy. The stock market is supported by factors such a protracted period of rising stock prices, excessive economic optimism, price-earnings ratios that are higher than long-term norms, as well as the exploitation of marginal debt and leverage by market players. In order to reduce their losses caused by the falling value of the equities, shareholders begin to sell off their shares..

Future of Investment or savings in Market Crash

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