five years. When the media writes about Sensex and Nifty hitting records these days, one important point is missing. We are comparing with 21,500 Sensex levels of 2008 which is nominal in nature and if we just apply 10 per cent annual inflation rate the real Sensex level is around 12,000 points now.
It is always said that investors should invest with a three to five year horizon. However, the last five years have been a waste for investors in a broader sense. How would you justify that?
It is now 30 years since the country started opening up the economy in 1984 with the first budget of the Rajiv Gandhi government that was presented by the then finance minister VP Singh. Since then, the capital market played a major role in pushing India into the group of fast growing economies of the world.
During the last 30 years, it is for the first time the markets had a block of five years of bad markets now. Except for this period, the three to five year investment horizon worked in India. But we must reckon the fact that when the country was exceptionally weak in perceived governance, such exceptions do happen and that only proves the general rule right.