Sensex may reach close to 3, 00,000 in next 15 years
In the year 2006 Sensex was around 12,000 & now it is close to 60,000, generating CAGR of 10%. The Earning is almost replica of the return during this time. This reflects in long run that Stock Market is slave of earning growth.
Taking consideration of past Performance & future economic outlook. The market may provide a 10-12% CAGR for the next 10-15 years. If we can project the same, we find the market will reach close to 3,00,000 by 2036!
The major parts between 2006 and 2021 the stock market faced two major crashes,one in 2008 global crash (recession) and the other in 2020 Covid crash.
Despite of this, market easily generated 10% CAGR. So in between 2021 to 2036 if any two crash will arrive, market has supreme potential to digest it.
According to the research, considering at least two crashes in this projection.
We can easily predict that market may trade between somewhere around 2,50,000 to 3,00,000 by 2036.
How to make money for next 15 Years?
Taking this into consideration, if one invests in FD, PPF or any small saving scheme his money grow around 2.5 times in the next 15 years.
But in stock market there are better possibilities with just a slight risk, investors can easily make around 4.5 times of their money in next 15 years, which is twice the amount of any other asset. So one has to allocate properly & diversify according to their goals.
HOW TO GET MAXIMUM RETURN FROM STOCK MARKET?
To get maximum return, the first thing can be done is that don’t chase returns. Second thing don’t try to beat the market. These two mantras of stocks will help you achieve your goals, instead try to Compound your money.
Investing in Index funds can be the best option right now. If the Sensex grows 4 to 5 times in the next 15 years, your money will also grow at the same pace without having to participate actively or giving time to select stocks.
This is the best technique to grow your Money with limited Risk.
The other one is of Warren Buffett style i.e Invest in stocks which create monopoly, sustainable and is traded below or close to their Intrinsic Value.
Investors can follow both the approaches to get maximum Compounding.
Lastly don’t forget in the long run, Compounding is the 8th wonder of the world. “Who understand it earns it and who doesn’t pays it”.