Historic day in Indian Stock Markets

Indeed it was a historic day in Indian Stock Markets. Within opening of few minutes, the BSE Sensex and Nifty hit the upper circuit of 15%, trading being halted for 2 hrs. Later another 5%, halted the trade for the rest of the day. Everyone is bullish, once again.

There are a lot of predictions out there on what the markets will do tomorrow, and the day after... but what should really matter to you and ask yourselves that , is this possibly the start of a long-term rally in stock prices ?

But think again and hold back your enthusiasm just yet.. there is every chance that egged on, once again, by over-enthusiastic TV anchors and unscrupulous brokers, you will go out and invest in stocks which over the long-term will disappoint.

You don’t want to do that.

This is the time to lay the foundations for a wealthy future. Not the time to speculate in momentum stocks. So be very careful, as you always should be, in what you invest in.

Historical Sensex Returns Updated - 2024

Historically Sensex has given returns of about 15% per year, despite volatility and price fluctuations of about -20% to +60%. The following table shows S&P BSE Sensex historical data - start & close values and the yearly returns of the sensex from 2000 to 2024. So far during the year the index has hit an all-time high of 75,124 and despite markets hitting all time highs not all stocks make all-time highs. There are many stocks still below their highs. Stocks like HDFC Bank, ITC, Asian paints are still well below their highs and some of them have given low returns over last 3-5 years. Individual or Retail investors can achieve consistent returns through investing via mutual funds , whether it be active or passive. Chasing returns from individual stocks is futile. Be a wise investor !

Historical BSE Sensex returns - updated 2013

We have already seen the historical returns of the BSE Sensex, which indicated an average return of about 20% per year, despite many yearly returns varying from -20% to +60%. The following table shows BSE Sensex historical data - open, close and the yearly returns of the sensex from 2000 to 2012. There are some interesting points to note from the above table. Post 2008 crash of about 50% and 2011 negative returns of 24%, markets have given positive returns of 81% and 25%. Also the average returns for the past years is about 20% despite the markets being down 24%. The lesson is pretty much clear - long term investing pays and one need not bother too much about the ups and downs of the markets. During the past few years, the returns from investing in individual stocks have been varied. Despite markets being at 2 year highs, only a few stocks are at similar highs, while most of them are still languishing well below their historical highs and are down anywhere ...

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