By: Punam Sharma

**Sensex Performance over various holding **

- Over a longer period, Sensex returns have always been positive. To verify this, we have calculated rolling returns* for different holding periods (1, 3, 5, 7, 10, 15 and 20 years) starting from January 1982 till December 2012.
- Chart below shows the minimum, maximum and average returns over different

holding periods.

- From the above chart, we can see that as the holding period increases, chances of

negative return diminish. - 1 year holding period gives maximum and minimum 265% and -56% returns

respectively while a 20 year holding period maximum and minimum returns are 26% and 7% respectively. - With increase in holding period, risk** associated reduces.
- Chart below shows return-risk profile over different holding periods.

- Table below shows various returns, downside risk probability^ of getting negative returns and probability of getting returns below the risk free return #.

- Downside risk probability diminishes and becomes nil with increase in holding period Holding period of more than 10 years give only positive return.
- Also chances of getting less than the risk free rate reduces over a longer period of time.

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