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Indian equity returns beat US markets, Rs 100 invested in 1990 would have become Rs 9500 in India while in US it would have been only Rs 8400, according to a report by Motilal Oswal.
The report highlighted that Indian equity markets have delivered impressive returns, growing investments nearly 95 times since 1990. The report data noted that if an investor had invested Rs 100 in Indian stock markets in 1990, it would have grown to Rs 9,500 by November 2024. In comparison, the same Rs 100 invested in US stock markets during the same period would have grown to Rs 8,400. This clearly indicates that Indian markets have provided better returns than their US counterparts. The report also 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 Rs 100 invested in gold in 1990 would now be worth Rs 3,200, significantly lower than the returns generated by equities. The worst-performing asset, as per the report, was cash. Keeping Rs 100 in cash and investing it in instruments offering nominal interest rates would have only grown it to Rs 1,100 over 34 years. This starkly highlights the importance of investing in assets with higher growth potential. The report also shared that tt is common knowledge that investments, when given time to grow, have a much higher chance of reaching their full potential. The problem arises when personal capital is invested, as it is simple 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 last months or even years, portfolio profits and even capital 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 realizing that they are doing themselves more harm than good. It said "Therefore, we believe that the key ingredient to healthy investment portfolios is to have a long term vision". When it comes to 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 as a very short period of time since volatility can be very high and the investor could suffer losses. (ANI)
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