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Charts & Analysis

Sensex Rolling 5Y Returns at 2.21%

The rolling returns for the Sensex (suitably annualized) are in the graph below:

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Read this as: At "May 12" the 10 year return indicates the return I would have got had I invested 10 years ago in the Sensex, i.e. in May 2002, annualized.

Note carefully that none of the lines are close to their lows – that means returns are likely to go lower. But that needn’t mean the index itself goes down from today’s value; in 2013 Jan, the five-year-ago value will be over 20,000 for the Sensex, so even if we stay where we are, rolling returns will look negative.

Sure, you could say why not do a 5 year investment plan (SIP) instead, investing every month. What about those returns then?

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Sadly, our returns have been lower than a fixed deposit, other than the 10 year SIP return. But that, I think, is because the Great Indian Stock Market Story Was Only For Five Years.

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