Indian stocks skyrocket with 95X return over 30 years, outpacing US market

According to a report by Motilal Oswal, Indian equities have outperformed US markets over the past 35 years, with investments in the Indian equity markets growing by nearly 95 times since 1990.

As per the report, if an investor had invested ₹100 in Indian stock markets in 1990, it would have grown to ₹9,500 by November 2024.

In comparison, the same ₹100 invested in US stock markets during the same period would have grown to ₹8,400, showing that Indian markets have delivered higher returns than US markets.

Equity vs other asset classes

Moreover, the report further compared the performance of equities with other investment options, such as gold and cash. It noted that gold, traditionally considered a safe-haven asset, delivered a return of 32 times during the same period. This means that ₹100 invested in gold in 1990 would now be worth ₹3,200, significantly lower than the returns generated by equities.

The worst-performing asset, as per the report, was cash. Keeping ₹100 in cash and investing it in instruments offering nominal interest rates would have only grown it to ₹1,100 over 34 years. This starkly highlights the importance of investing in assets with higher growth potential.

The report also shared that it is common knowledge that investments, when given time to grow, have a much higher chance of reaching their full potential.

However, the problem arises when personal capital is invested, as it is simply human nature to notice every small turbulence that depletes one's capital.

 Initially, an investor may be able to comprehend the situation, but when the bear market lasts for months or even years, portfolio profits and even capital can begin to erode. The report mentioned that this is when for most investors, patience begins to wear thin and fear sets in. In such a mindset, investors end up making impulsive decisions that are solely based on emotions without realising that they are doing themselves more harm than good.

“Therefore, we believe that the key ingredient to healthy investment portfolios is to have a long-term vision,” said the domestic brokerage.

When it comes to the computation of tax on capital gains, long term is considered as a holding period of one year for equities and a period of two years for debt instruments.

However, from an investment perspective, the report stated that one year is considered a very short period of time since volatility can be very high and investor could suffer losses.

(With all inputs from ANI)