A Look at 35 Years of Nifty Returns
Over the past 35 years, Nifty’s annual returns have displayed an intriguing pattern. This data, sourced from a reliable reference, highlights how market behavior has evolved over time. One notable observation is the reduced intensity of market fluctuations in recent years.
Source: Zerodha
Volatility Has Decreased
In the earlier years, particularly before the 2008 global financial crisis, the market experienced significant swings. Some years yielded high gains, while others resulted in substantial losses. However, post-crisis, the range of gains and losses narrowed, indicating a decrease in market volatility over the past 15 years.
Changes After the 2008 Crisis
After the global financial crisis, substantial capital flowed into the markets, resulting in increased liquidity. This availability of capital meant that even during major events, such as the COVID-19 pandemic, the markets still provided positive returns for the year. This trend suggests that there is now stronger support for the markets during downturns.
Inherent Risks
While it may seem advantageous that markets no longer experience dramatic declines, this situation can also be perilous. Investors who began participating in the last 10 to 15 years may not fully grasp the extent of potential market downturns. In previous decades, it was common for the market to decline for two or three consecutive years. The new generation of investors, however, has primarily witnessed upward trends, fostering a belief that the market will only rise—a notion that isn’t accurate in the long term.
The Importance of Historical Perspective
Understanding historical trends is crucial, as markets can still experience sharp declines. Believing that there is no risk of loss can lead to dangerous complacency. Should adverse situations arise again, significant drops could occur. Therefore, new investors should heed historical lessons and approach their expectations with caution.
Do you think today’s market is safer or just quieter before the storm? Drop your views in the comments! If you found this article useful, SHARE it with your fellow investors!
WeekendInvesting launches – The Momentum Podcast
This episode of The Momentum Podcast unpacks 15 years of investing experience!
We cover:
✅ Early investing mistakes and learnings
✅ Navigating market fluctuations (including the 2020 crash)
✅ The transition from direct stock picking to managed funds
✅ The role of momentum investing in long-term strategy
✅ Key takeaways for building a resilient investment portfolio.
Whether you’re new to investing or looking to refine your approach, this episode is packed with practical advice!
