E-Paper
Sensex lesson: stay in for the long term
In a year of high volatile in the markets, long-term players have struck it rich. Pankaj Dwivedi, who works for a leading private sector bank, saw his Rs 50,000-investment in Reliance Industries made in February almost double. Read on.
In a year of high volatile in the markets, long-term players have struck it rich.
Pankaj Dwivedi, who works for a leading private sector bank, saw his Rs 50,000-investment in Reliance Industries made in February almost double. But the Rs 20,000 he put in Bharti Airtel — a tip-based investment planned for two months — is stuck. “My long term investment has done well for me while I am stuck with my short-term call,” he said.
The Sensex has generated 80 per cent returns in the calendar year — second only to calendar 1991, which saw returns of 86 per cent.
“This year has taught investors the lesson that it pays to remain invested for longer duration,” said Anup Bagchi,executive director, ICICI Securities. “Also in this decade at least two big events (9/11 and the collapse of Lehman Brothers) made people think that it’s the end but still our markets have grown three-and-a-half times, and this strengthens the long term investment principle.”
A majority of the investors who maintained a longer-term view have done well. At least three out of five BSE 500 companies have outperformed the Sensex, and one of every two companies generated a return in excess of 100 per cent between January 1 and December 30, 2009.
In BSE 100, every six out of 10 companies outperformed Sensex.
But experts sound a word of caution. “Returns generated in 2009 are not possible in 2010. Both market players and investors should have reasonable expectation,” said Sundeep Sikka, CEO, Reliance Mutual Fund.
“India, China and Brazil will attract most foreign investments and that should help the stock markets,” said Ashvin Parekh, partner, Ernst & Young.
