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ShareMumbai: You were no fool for having invested in the Bombay Stock Exchange Sensitive Index (or BSE Sensex) companies on April 1 this year. For, six months on, a sum of Rs1,000 put into the basket of 30 stocks that make up the Sensex would have gained you, on an average, Rs730.
The Sensex, as a composite, has yielded returns of 73.04% in the six-month period, signalling a recovery from the bear market. The performance over the first half of the financial year has been the best since 1990, when the index had given returns of 81.82%.
Investors who had turned to safer avenues during the bear run, like gold or fixed deposits, would have had comparatively muted returns.
Gold, for instance, gained 3.34% in the same period, going from Rs15,635 to Rs15,130, while fixed deposits gave an average return of 6.88% for the year. Which means, the hypothetical Rs1,000 would have translated into Rs1,033 and Rs1,034 respectively for the two asset classes during the April-October period.
The rise in the Sensex stocks can be attributed to foreign institutional investors pouring Rs66,806 crore into the Indian equity market.
Experts say that it is not too late for investors to become part of a long-term growth story.
"There is definitely money to be made over the long term. They can invest in larger companies whenever there is a correction, but they should be cautious about investing in mid-caps," said Anand Shah, head of equities, Canara Robeco Mutual Fund.
On October 1, the Sensex closed at 17134.55, or 7232.56 points higher than the April 1 level of 9901.99.
Tata Motors was the best performing stock among the Sensex pack. It more than tripled, going up 222.55% in six months, moving from a share price of Rs179.85 on April 1 to Rs580.10 on October 1.
Thirteen other companies would have doubled your investment with returns ranging from 105.77% for State Bank of India to 179.86% for Jaiprakash Associates.
A correction may not be too far away for those who are waiting for the right time to dip their toes in the Sensex stocks, though experts advise that a habit of regular investment would work better than trying to time the market. "We could see a 10-15% downside in the near future though the markets could go up another 2-4% looking at the current momentum," said Paras Adenwala, managing director, Capital Portfolio Advisors.
"People can still invest in the markets because these are the early stages of the economic recovery. Things will improve from now but it would be advisable for investors to put in their money in a systematic manner," said Mahesh Patil, co-head of equities, Birla Sunlife AMC.
