Indian stocks vs US markets: Investment of ₹100 grew to ₹9,500 in India since 1990 while in US it grew…

A Motilal Oswal report stated that Indian equities have outperformed US markets, with ₹100 invested in India in 1990 growing to ₹9,500 by November 2024, while the same investment in the US would have only reached ₹8,400.

The report further highlighted that Indian equity markets have delivered impressive returns, growing investments nearly 95 times since 1990. 

It further noted that if an investor had invested ₹100 in Indian stock markets in 1990, it would have grown to ₹9,500 by November 2024.

In contrast to this, while comparing the same with US stick markets, the same ₹100 invested in 1990 would have grown to ₹8,400.

In comparison, the same ₹100 invested in US stock markets during the same period would have grown to ₹8,400, showing that Indian markets have delivered higher returns than US markets.

Moreover, the report further compared the performance of equities with other investment options, such as gold and cash. It noted that gold, traditionally considered a safe-haven asset, delivered a return of 32 times during the same period. This means that ₹100 invested in gold in 1990 would now be worth ₹3,200, significantly lower than the returns generated by equities.

The worst-performing asset, as per the report, was cash. Keeping ₹100 in cash and investing it in instruments offering nominal interest rates would have only grown it to ₹1,100 over 34 years. This starkly highlights the importance of investing in assets with higher growth potential.

The report also shared that tt is common knowledge that investments, when given time to grow, have a much higher chance of reaching their full potential.

The problem arises when personal capital is invested, as it is simple human nature to notice every small turbulence that depletes one’s capital. Initially an investor may be able to comprehend the situation, but when the bear market last months or even years, portfolio profits and even capital begin to erode.

The report mentioned that this is when for most investors, patience begins to wear thin and fear sets in. In such a mindset, investors end up making impulsive decisions that are solely based on emotions without realizing that they are doing themselves more harm than good.

It said “Therefore, we believe that the key ingredient to healthy investment portfolios is to have a long term vision”.

When it comes to computation of tax on capital gains, long term is considered as a holding period of one year for equities and a period of two years for debt instruments.

However, from an investment perspective the report stated that one year is considered as a very short period of time since volatility can be very high and the investor could suffer losses.

(With all inputs from ANI)