Dhanteras & Diwali Special Offer
Hi,
Wishing you & your loved ones a very happy Dhanteras and Diwali. 🪔
Want to know an interesting stat ?
Since September 2024, gold in rupees is up about 81%, while the Nifty 500 is still down 8.7%. This Dhanteras, we looked at what a fixed 25% allocation to gold does to a portfolio, and the 27-year numbers are hard to ignore.
To mark the festival, take 35% off our asset-allocation strategies (Mi EverGreen, Mi Allcap GOLD & All Seasons) with code DIWALI26, valid till 8 November 2026.
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1. US Markets Have Delivered Higher Returns
There is often a debate about whether the Indian stock market is better than the US stock market in terms of returns. However, when we compare the numbers in US dollar terms, the results tell a different story. The average yearly return from a five-year SIP in the Nasdaq 100 has been around 17.3%. This is much higher than the S&P 500, which has delivered 12.6%. In comparison, the Indian stock market has delivered an average return of just 9.5% in US dollar terms.
2. How Other Countries Compare
When we compare stock markets across different countries in the same currency, the Nasdaq 100 stands at the top with 17.3% average yearly returns. The S&P 500 comes next with 12.6%, followed by Germany at 9.8% and India at 9.5%. Other markets, including France, South Korea and Brazil, follow. These numbers show that the US stock market has delivered better average returns than India over the period being studied. It also shows why comparing returns in the same currency is important when looking at investment opportunities across countries.
3. Nasdaq Has Been More Consistent
Average returns are not the only thing that matters. Consistency is equally important for long-term investors. Data shows that 85% of five-year periods in the Nasdaq 100 have delivered returns of 12% or more. This means investors have had a much higher chance of earning strong returns over a five-year period. The Indian stock market, on the other hand, has managed to deliver at least 12% returns in only 28% of five-year periods. This is a big difference and shows that India has been less consistent in delivering higher returns.
4. India Lags Behind Other Major Markets
The difference becomes even clearer when we compare other major stock markets. The S&P 500 has delivered at least 12% returns in 58% of five-year periods, while Germany has achieved this in 37% of the periods. India stands much lower at just 28%. So, it is not just about average returns. The chances of getting good returns over a five-year period have also been lower in India compared to several other markets. This challenges the common belief that India is always among the best-performing stock markets in the world.
5. Why Indian Investors Should Look Beyond India
These numbers highlight an important lesson for Indian investors. Depending only on the Indian stock market may not always be the best investment strategy. Different countries perform well at different times, and there can be long periods when the Indian market does not deliver strong returns. During such periods, other markets like the US may perform better. Investing across different countries can help reduce this dependence on a single market and create a more balanced portfolio. Global diversification gives investors a chance to benefit from growth in different parts of the world.
6. Diversification Can Improve Your Investment Strategy
The key takeaway is that investors should not assume that the Indian stock market will always deliver better returns than global markets. When returns are compared fairly in US dollar terms, markets like the Nasdaq 100 and S&P 500 have shown better average returns and greater consistency. This does not mean that India will always underperform or that US markets will always remain ahead. However, it does show why having some exposure to international markets can be useful. A well-diversified portfolio with investments across different countries can help investors stay better prepared for changing market conditions.
