X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Thirty Year Proof That Safe Stocks Will Stay Relevant to High Risk Investors - Views on News from Equitymaster
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
The Equitymaster Research Digest

Thirty Year Proof That Safe Stocks Will Stay Relevant to High Risk Investors
Oct 18, 2016

  • An exit with 330% gains
  • Competition to FMCG
  • What's cooking at Cox & Kings?

The country's benchmark index, BSE Sensex, celebrated its 30th birthday this year. Yet most Indians are unaware of the fact that the index offered returns of 16.4% per annum, since its base year (1979).

First of all, 90% of Indian middle income households do not invest in equities. As of March 2016, the total demat accounts in the country were barely 25.3 million (2% of India's population).

Most of those who do invest, prefer to speculate in high risk stocks for quick returns. As a result, most of the wealth that the Sensex has created so long, has been concentrated in few hands. And even today, such relatively safe but big returns eludes investors looking for only high risk - high return stocks.

Now the thirty year proof that I am talking about is not just about the phenomenal returns that the Sensex has delivered. But it is also about the huge weightage of large cap stocks in Indian stock markets.

Consider this. The top 50 companies in India (in terms of market cap) have on an average had 60% share of total market capitalisation, in last 30 years. In the US, the weightage of the large caps in the total market cap has hardly ever crossed 40% during this period.

So anyone who has prudently invested in the best Indian large cap stocks, at the most opportune valuations, has accumulated huge wealth in stocks over last 30 years. Unfortunately the number of such investors are far too few.

To Read the Full Story, Subscribe or Sign In


Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

MARKET STATS