Stock market returns hardly influenced by economic growth

Is this rate of return the result of the scintillating performance of the Indian economy over the last few years

Despite the carnage in the stock markets, if you had put in money in the MSCI India index 10 years ago, your annualized return would have been a healthy 12.78% (as on last Friday). If you had put in your money five years ago, your annualized return would be a respectable 11.97%. That’s well over the rate you would have earned on any fixed income instrument or on fixed deposits over the period, and since long-term capital gains are tax-free, your return would also have been tax-free.

Is this rate of return the result of the scintillating performance of the Indian economy over the last few years? That’s difficult to say, when you look at the other emerging markets that have annualized historical returns far exceeding those from MSCI India over the past 10 years.

Also Read: Spot the tigers (Graphic)

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