Peter Mallouk recently shared an insightful post about how investors imagine their returns to follow a smooth, linear path — starting at point A and finishing at point B, expecting consistent growth year after year. But the market rarely moves like that. Reality looks quite different. You might get a blockbuster return in one year, followed by a painful drawdown, then perhaps a flat phase, and so on. The journey is always jagged and unpredictable, even if the destination remains the same.
The Real Journey of Nifty Since 1991
If you go back to 1991, the Nifty index was at around 300. Fast forward to today, and we’re hovering near the 23,000 mark. But the journey has been anything but smooth.
There have been powerful rallies, prolonged consolidations, and deep crashes — like the dot-com bubble, the global financial crisis, and COVID. Every new high was eventually met with a long pause or correction, and despite that, the long-term trajectory has been upward.
Volatility is Compressing, But That’s Not the Norm
More recently, it seems like market volatility has started to compress. Compared to earlier decades, the Nifty is not deviating much from its expected return line. That might give a false sense of comfort, but investors should always remain prepared for surprises. Markets don’t care about our smooth-line expectations. At any point, the index can swing sharply up or down, well beyond what models or past experience might suggest.
Your Process Is the Only Constant
Ultimately, what will keep you grounded is your process. Whether it’s cutting your losers quickly, sticking with winners, sizing positions correctly, or following a systematic strategy — the discipline you maintain is what ensures your long-term expectations are met, even if the short-term path is wild. Focus less on predicting the exact return, and more on executing your framework. Because in the long run, a robust process almost always outperforms fragile expectations.
WeekendInvesting launches – The Momentum Podcast
Join Yassar, a Dubai-based engineer turned investor, as he shares his 15-year journey—from Wall Street dreams to mastering systematic trading. In this debut episode, Yassar and Alok dive into real estate, gold, crypto, and key lessons for navigating markets.
