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The Sensex Must Double in Three Years For Long Term SIP Returns of 10%

If you did an SIP for every single month – the same amount – for a long time,then how have your returns been? Look at five and ten year returns:


Rolling SIP means that on May 31, 2014, I will consider my return as what I would have got if I had invested in the Sensex every month since May 2009 (five year SIP).

Important points:

  • The Sensex data shows phenomenal returns in the last century on a five and 10 year period.
  • In the early part of this century, 2000-2004, was a lousy period for stocks overall. So 10 year and 5 year SIP returns were sub 10% as well.
  • From 2005 we have not see the 10 year return dip below 10%.
  • The five year return went to zero in 2012-13, but has recovered. Today it stands at +10.7%.

And the Best Part

To maintain a 10 year SIP return of 10%, in December 2017, the Sensex will have to be at 52,700.

(Assuming a 2% dividend yield adds up and gives you 12%)

That’s more than double from where we are. If we do get there, it will be one impressive move!

  • Shash says:

    Don’t see it happening 😉

    • Pradeep N says:

      Thanks Shahs, may your tribe grow, more the disbelievers, easier for Sensex to double,
      Past bull markets have shown that they double for the least and triple most of the times. 🙂

  • IsItPossible says:

    SIP returns were awesome during 2003-2007
    SIP return were poor during 2007-2010
    SIP return were moderate during 2011-2013
    SIP return starting this year 2014 so far looking good but partly due to election hype.
    Million $ question: What do you predict in next 3 years!!!
    Depending on current government policies and execution in next 6-18 months shall decide fate of this market but as of now things are looking bullish….

  • Andrew L D Cunha says:

    I just checked the SIP returns of mutual fund Sensex Index fund. 10 years returns (XIRR) 11.68%

  • Mehul says:

    Is there anything more to continuously marketing SIP to retail investors than getting investor to keep regularly investing in MF (and thereby keep commission going on for distributor) -a la LIC model?
    Is it possible to take a MF with highest absolute return in 5-yr and 10-yr period and see monthly SIP returns for that fund? Will it beat / under perform its own long-term return?

  • Anoop says:

    Interesting analysis. SIPs serve as a tool to counter some of our behavioral biases about expecting to be able to time markets and to dither when we some red. If we agree that markets will move up over the long run (> 5 years) but will be volatile in the interim, SIPs reduce the downside from downward volatility and hence are a great tool.