42 Years SENSEX Return- 15.92% Per Year

Indian equity market delivered good return in last 42 years. As of 31st March 2021, Sensex closed at 49,509 points.

BSE completed 42 years since 1979-80 (base year). But what is the return per year? Does the SENSEX give a good return per year in the long term?

Why 1979-80 years? This is the base year of the Sensex. That is the year from which Sensex came into existence with the base as 100.

I am trying to explain the yearly return delivered by Sensex (Equity) in the last 42 years. Assume you have invested Rs. 1 lakh in Sensex 42 years ago. As of 31st March 2021, the value was Rs. 4.95 crore.

If we considered dividend yield in addition to capital appreciation for Sensex, the future value would be more than Rs. 4.95 crore. If we assume a dividend yield per annum of 1% on average, the Sensex returns worked out to Rs. 7.10 crore.

For your understanding, put it differently. If you have invested in equity, your investment has multiplied wealth by 495 times.

Sensex has seen multi-fold returns over the past 42 years, as the 30-Stock Index managed to rally from 100 level back in 1979 to 49,509 on 31st March 2021. If you want to beat inflation and create wealth, you should invest in equity or equity-related schemes.

42 Years SENSEX Return – 15.92% Per year. (See the below table

Yes, Sensex has delivered a 15.92% return per year since its inception.

In the last 42 years, Sensex has given a Compounded Annual Growth Rate (CAGR) of 15.92%. But the journey has been a volatile one. In the last 42 years

  • 29 years have given a positive return [Averaging (+) 40.05%]
  • 13 years have given a negative return [Averaging (-) 17.27%]

You can compare this Sensex return with other asset classes -Fixed Deposit, Gold, Silver, etc. Check other asset classes per year return? And also the impact of inflation and taxation on each asset class return. Remember, inflation and taxation are two silent killers of your wealth.

Taxation impact for each asset class and your wealth; we can work out the return after taxes. FD would automatically turn negative. Gold and Silver would have provided a slight return. Only equity would have provided a real rate of return of around 9% per annum.

“The stock market is a device for transferring money from the impatient to the patient.” ~Warren Buffett

 In my opinion, if you have already lost an opportunity to make money in the last 42 years when stocks and the Sensex (stock market) have multiplied many times, you need to be a disciplined investor and become an investor rather than a spectator or a trader.

Investors who missed this wealth-creation opportunity should invest now.

Be an Investor!

Disclaimer: The views mentioned above are of the author only. If used, data and charts have been sourced from available information and have not been authenticated by any statutory authority. The author and www.rupakumarpradhan.com do not claim it to be accurate nor accept any responsibility for the same. The views constitute only the opinions and do not constitute any guidelines or recommendations on any course of action to be followed by the reader. Please read the detailed disclaimer of the website.

I am a CERTIFIED FINANCIAL PLANNERCM, CHARTERED WEALTH MANAGER®. For the moment, I have shared my experience growing up with you because it had a tremendous impact on how I do what I do. If you have a question about your financial situation, please connect with me. I’d be delighted to try to be of service.

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