India is a savings country. It suits the government very well. Most Indians keep the money in banks, national savings certificates, Kvp. Of course to ‘save’ Income tax they put the money in LIC.
When the government gets cheap money it is happy. Of course these days it needs the equity market also has to do well – after all it has to sell equities too!
Now a few (ok quite a few) people are happy to keep writing saying ‘The market has gone nowhere’ …which is not very wrong too.
The Index was 18000 4 years ago and it is still there….so it has really not gone anywhere.
However there are many shares which have done well, and far more importantly there would have been a 2-4% dividend yield. Now consider the TOTAL RETURN INDEX….or the INDEX with reinvestment of dividend. I do know that there is a total return index, it would be interesting to do a simple calculation of what returns one has got over the past say 30 years ASSUMING A RE-INVESTMENT of dividends. I can assure it will be MUCH more than 17-18% which is the return touted over the life of the sensex – 1979 to 2012.
Anybody who has done the exercise? I think Deepak Shenoy of capitalmind.in has done it, but not sure….
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