It pays to stay invested in the long run…

The myth is equity investing is risky business. Find below a chart to show how it makes sense to stay invested in stocks in the long run. Holding stocks for a year or so may give negative returns but if held for more than 5 years returns have always been positive. (Even in 2008 when the markets crashed). So equity investments are not that risky if held for more than 5 years. If we have a good portfolio of stocks timing doesn’t matter, if held for more than 10 years expect double digit returns. To top it all the chart below only shows index returns & stock portfolios outperforming the index will give higher returns. Please note that returns calculated are only on the principle and not dividend, if included returns will be higher.

SENSEX Returns over the last 19 years
Returns (%)
Date SENSEX 1 3 5 7 10 12 15
Year Years Years Years Years Years Years
27-Nov-98 2782              
26-Nov-99 4705 69.13            
27-Nov-00 3969 -15.64            
27-Nov-01 3288 -17.17 5.72          
27-Nov-02 3174 -3.45 -12.3          
27-Nov-03 4989 57.18 7.92 12.39        
25-Nov-04 6035 20.97 22.44 5.11        
26-Nov-05 8889 47.29 40.95 17.5 18.05      
27-Nov-06 13774 54.95 40.28 33.18 16.58      
27-Nov-07 19128 38.87 46.89 43.22 25.19      
26-Nov-08 9027 -52.81 0.51 12.59 15.52 12.49    
27-Nov-09 16632 84.25 6.49 22.48 26.7 13.46    
26-Nov-10 19137 15.06 0.02 16.57 21.17 17.04 17.43  
25-Nov-11 15695 -17.98 20.25 2.65 14.63 16.92 10.56  
27-Nov-12 18842 20.05 4.25 -0.3 11.33 19.5 13.86  
27-Nov-13 20420 8.38 2.19 17.74 5.79 15.13 16.44 14.21
28-Nov-14 28694 40.52 22.28 11.52 5.96 16.87 20.14 12.81
30-Nov-15 26145 -8.88 11.54 6.44 16.41 11.39 14.80 13.39
30-Nov-16 26652 1.94 9.28 11.17 6.97 6.82 13.18 14.97
29-Nov-17 33602 26.08 5.40 12.27 8.37 5.80 11.72 17.04
No of Rolling Returns 19 17 15 13 10 8 5
Negative Returns 6 1 1 0 0 0 0

Sabyasachi Paul has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata.He also manages a portfolio on the online platform Kristal. Find link to the strategy named ‘The Tortoise’

Author: Sabyasachi Paul

The Author has been associated with equity research and advisory on equity markets in India for over 9 years & currently heads the equity research desk of Eastern Financiers Ltd, Kolkata. He also manages a portfolio on the online platform Kristal. Find link to the strategy named 'The Tortoise'

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