Tuesday, 19 May 2020

_*6 Year Rolling Returns (from each year end), S&P BSE Sensex, How does it fare?*_


πŸ˜€ Well, it's not a complicated chart 

Let me just break it up

_Absolute & CAGR returns for a 6 year holding period...if one invested at the end of each year and held it for the next 6 years_

Why did I choose a 6 year period? πŸ˜€πŸ˜Ž....we've just gone through an anniversary of 6 year (itch?)....oops, maybe πŸ™„, maybe not πŸ€”

Bottomline....

_*Outliers*_ - less than 5% CAGR & more than 30% CAGR on a 6 year term - probability is low

Of the 4 instances giving a 30% + CAGR....3 have come in the '90s decade - _*so, let's forget about those kinds of returns on a 6 year basis (at an index level)*_

5 of the 6 times that delivers less than 5% CAGR came in the last 2 decades...again an outlier because 3 of those instances came during the 2000-2003 period

The best part...

5 - 10% CAGR for about 14.71% (ok kinds)

_*about 56.06% historical probability that one ended with between 10% to 30% CAGR*_

That's quite a nice way to end with, for holding 6 years plus on the equity index πŸ˜€πŸ‘†πŸΌ...the sweet spot of returns

Bottomline, _*if one quits the board game in the middle, there's nothing left to win for*_

_*stay to the end, stay the course*_

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