A veteran fund manager just reminded us that Indian shares have created far more wealth than gold or U.S. stocks over the past three decades.
Long‑term Returns of Indian Stocks
Using the Nifty 50 Total Return Index (which adds dividends), the fund manager showed a 1,922% gain from 31 Dec 1998 to today. That works out to an annualised return of 11.78% when measured in U.S. dollars, even after accounting for the rupee’s long‑term fall.
How Gold Performed
Gold, a favourite safe‑haven for many Indian households, delivered a 1,472% rise over the same period, or about 10.74% per year in dollar terms. While impressive, it still lags behind the equity returns.
U.S. Stock Market Comparison
The S&P 500 – the global benchmark for equities – grew 821% in the same window, giving a 8.57% annualised return in USD. Even when comparing broader Indian markets (the NSE 500), the return jumps to 2,590% (12.96% CAGR), further widening the gap.
Why the Comparison Matters
- Currency‑adjusted returns matter: Looking at returns in a common currency (USD) removes the illusion that a weak rupee hurts Indian investors.
- Dividends count: Total‑return indices include dividend payouts, which boost long‑term gains.
- Diversification insight: For investors seeking growth, Indian equities can be a strong addition alongside global assets.
Takeaway for Retail Investors
If you’re planning a long‑term portfolio, Indian stocks have historically outperformed both gold and the U.S. market on a dollar‑adjusted basis. That doesn’t guarantee future results, but the data makes a solid case for keeping a meaningful slice of your equity allocation at home.
Remember, this is perspective, not prediction. Do your own research and consider your risk tolerance before making any investment decisions.