Nifty's struggle, can you make money?
Over the past year, Nifty has been range-bound delivering less than an FD. The markets have neither dropped significantly nor are they showing any indications of the next bull swing.
So does investing during this range-bound time frame make sense, when markets have no clear direction?
When it comes to equity, we can always seek some hope by looking at past scenarios.
Whenever Nifty has been range bound, and not dropped more than 10%, the markets have given an annualized return of 10.5% over the next 3 years.
Here is a good chart prepared by Capitalmind to showcase the performances by tracing back all instances of a similar occurring through the years:
Another fact to take into account is, currently, the Nifty 50 stocks have reported an aggregated 19% increase in net profits, whilst the nifty has only increased by 3%.
As the saying goes, the markets are a weighing machine in the long run, even though they might be unrealistic in the short run.
Thus, with companies improving their earnings, and Nifty being range-bound, it does weigh in on the positive side stating that the market's next leg, will generate a greater amount of returns for all participants who are holding on.
Cheers!
End-Week Wisdom:
"Time is your friend, only when the stock picked is right." - Unknown
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