Yes, Indian markets have given zero or negative (point to point) returns in the past 2 years. It feels surprising, but it certainly isn’t something new. I will show you what happened to my portfolio in the last 16 years to give you an idea.


First, lets start with index returns.


Yup. That looks bad. In the last 24 months, Nifty 50, Nifty Next 50 and Nifty 500 all gave negative returns. In fact most lost almost 5% annualized! So you lost 5% in year one and then again lost 5% in year two! The riskier Nifty Midcap 150 and Nifty Smallcap 250 did not fare any better. They gave almost zero returns. And here we thought equity markets were supposed to give handsome double digit returns. So what happened?


Well, duration happened. If you look at a short duration of 2 years, the returns certainly will be all over the place. How about we expand our horizon ever so slightly to 3 years.


Now we see the usual double digit returns in some of the indices. Nifty 50 and Nifty Next 50 are laggards with 5% and 9% respectively. So yes, investments into equities need time. But 3 years is still a very short time frame to look at when it comes to equity investments. Ideally you should look at 7 to 10 years.


Over 10 years, all the indices performed almost the same except for Nifty Midcap 150 which outperformed the other indices. So a temporary sideways market (as it was for the past 2 years) or down market should not be of major concern. They happen regularly in stock markets. Of course now one might ask – what about the Japanese index which took 35 years to recover. There is always someone pointing it out. Unfortunately I don’t have an answer. I am just saying markets generally recover. I don’t have an answer for people telling me “this time it’s different” (commonly considered as the four most dangerous words in investing).


Now, coming to my corpus, it gave almost 4% return year on year for the last 2 years because of my asset allocation. That return is certainly lower than the almost 7% return (pre-tax) I would have gotten, had I invested fully in FDs. Likewise my 3 year and 10 year corpus returns were about 10% year on year which is perfectly inline with my expectations. So no worries there.


I have seen this kind of sideways market a couple of times since 2011, which is when I first started invested. I don’t have any experience before 2011, so I cannot personally comment. The biggest sideways market for me was from Jan 2011 to Feb 2014. That is more than 3 years of zero returns from the equity market from the day I started investing.


During those early years of my investment, my returns were a measly 6.5% on a year-on-year basis. The reason I got 6.5% and not the market return of 0% was simply because of SIP during the ups and downs of the market during that time. When the market eventually went up after 2014 all the way up to end of 2017 when I became financially independent, the year-on-year returns went up to 12.7%.


The same sideways market repeated again for 1.5 years from mid 2018 till end of 2019. And then a crash in March 2020. Yet, I stayed invested through out and by the next peak in Sep 2024 I was back to 12.7% year-on-year returns. So while the markets might be crazy, staying invested for long worked in my favor. Of course, I cannot promise it will happen every time and for ever, but just that the probabilities are on our side.


A disclaimer is in order though. I am not endorsing my style of investment as the only way to make money. I am sure there are better alternatives with lower risk, but this is all I could figure out for myself and it worked well so far. I am only sharing my last 16 years of experience with the market and your mileage may vary :). Please don’t misconstrue this post as investment advice. I am only hopeful that this sideways market will eventually become fruitful. Or is third time’s the charm and markets actually don’t recover for ever ;)?