IDFC AMC

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.
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  • Chart below shows the minimum, maximum and average returns over different
    holding periods.
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Sensex performance

 

  • From the above chart, we can see that as the holding period increases, chances of
    negative return diminish.
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  • 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.
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  • With increase in holding period, risk** associated reduces.
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  • Chart below shows return-risk profile over different holding periods.
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Return-Risk Profile

 

  • Table below shows various returns, downside risk probability^ of getting negative returns and probability of getting returns below the risk free return #.
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  • Downside risk probability diminishes and becomes nil with increase in holding period Holding period of more than 10 years give only positive return.
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  • Also chances of getting less than the risk free rate reduces over a longer period of time.

 

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