Investing Wisdom

We all agree on the fact that over the long run, Equity as an Asset class always beats FD return. Of course you have to pay for the extra return in terms of Volatility, riding through booms & the busts. Sensex (as a basket of top 30 Indian companies) was formally started in 1979 with the base price of 100. As I write this, Sensex closed at 38,645.18 today, a solid CAGR of 16%. Astonishing! Isn't it? And this is CAGR of dumb Index whose members are selected just based on Market Cap. Those who were lucky to lay their hands on few of the multi-baggers, are financially independent now. So, if someone during 80s wanted a return of 16%, all he had to do was to buy the Sensex. So, what what the reason of this mind-boggling return? And what if I am starting today? What is the guarantee that I will enjoy the similar return in future also? Aren't mutual funds repeatedly saying that past returns are no guarantee for the future? Well, I am not going to get into usual jargon like India ...