Sensex was born (1979) over all market return has been positive for 10 years

Hello friends let’s take quick note or Sensex and Nifty returns 

Sensex was born (1979), pick any 7-year period, you will notice that there are only 3 instances when the return was negative.

Extend that time period to 10 years, and the number of instances of negative return reduces to one. Extend the time period to 15, 20, 25, and 30 years, and you will see there is not a single instance of negative return!

Let me explain how to read the chart below.

The 2^nd and the 3^rd columns show the Sensex level on March 31^st for all years since 1979.

Next Column shows the 1-year return for each 1-year period. For example, if you invested in 1979, your return at the end of the year would have been 29%. Had you invested in 1980, your 1-year return would have been 35%, and so on.

The subsequent columns show the returns for each 3, 5, 7, 10, 15, 20, 25 and 30 year periods. If you had invested in 1979, your 30 year return would have been 16%. If you had invested in 1980, your 30-year return would have been 18%.

Note that these are annualized returns considering a one-time investment at the beginning of the fiscal year.

 

Important takeaways are –

1.       Long term investors have been rewarded well.

2.       As the investment duration increases, the volatility and the range of return decreases.

3.       As the investment duration increases, the probability of loss decreases.

4.       In the long term, Sensex has beaten inflation hands down

If this chart doesn’t convince a person about the long term risk and reward, nothing else will.

If we extend this logic and apply it to a basket of blue chips, the returns may be possibly higher.

Sensex ( History )

Nifty