Our Equity markets, represented by the Sensex, have risen more than 300 times from 1979 @ 16% per annum CAGR. Future economic growth projections by analysts within India and across the world put India amongst the fastest growing economies in the world. Our markets will again provide opportunities for multiplying wealth another 200-300 times or more in the next 3-4 decades. But share markets are not everybody’s cup of tea, with its wild fluctuations on every local or global event. It is only the optimistic that will participate in this wealth creation
From 1979 till date, 12 general elections were held in our country. There were assassinations of two Prime Ministers, at least 2 large financial sector scams and numerous corruption scandals. There were recessionary periods. There were times of large scale communal violence, times of war and conflicts with hostile neighbors. Natural calamities also came frequently, and there was a period of sanctions after our Pokhran nuclear tests. The outside world gave us the oil crisis emanating from the gulf war, the Asian financial crisis, the dotcom bust, 9/11, sub-prime crisis in US, economic crises across nations in Europe, Brexit etc
It is said that a pessimist sees difficulty in every opportunity and an optimist sees opportunity in every difficulty
There are always enough investment opportunities in sectors which are not affected or are only temporarily affected by such events. The few optimists who invested in the equity markets during such situations made much more than the 16% and multiplied wealth way beyond the 300 times
As we have written before, “the Indian economy is rooted in strong fundamental factors of a largely young, educated, hard-working and aspirational population which strives hard to overcome any challenges that arise out of any local or international event.” With an excellent savings pattern and a strong local consumption led economy, our dependence to the outside world is moderate
So next time you witness a crisis situation, don’t listen to the short-sighted doomsday theorists – be an Optimist!
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