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New Delhi: The Sensex crossed the 39,000 mark for the first time on Monday (April 1, 2019). The BSE benchmark took 40 years to scale the journey from 100 to 39,000. It was launched on April 1, 1979. During these 40 years investors wealth jumped 390 times (from 100 to 39,000). It means if one had invested Rs 25,641 in Sensex on its date of inception on April 1, 1979, the same would have risen to Rs 1 crore by Monday.

Strong inflows from foreign institutional investors and positive cues from global markets helped Sensex conquer the 39,000 mark during intraday trade on Monday. however, it closed 199 points higher at 38,871,87.

Analysts say Sensex is the ideal way to create wealth in the long term provided an investor is able to withstand the ups and downs that the market goes through. “People who get scared by volatility and do not stay the journey do not benefit from (the power of) compounding,” Rajeev Thakkar, fund manager, Parag Parikh Long Term Equity Fund, told the Times of India. He also said that it is not advisable for investors to look at stock prices frequently.

In 1985, when BSE started publishing the value of Sensex on a daily basis, the index gave a return of 94%, while in 2008, the index fell more than 50% after scaling the 20,000 level for the first time. Worth mentioning here is between 1995 to 2001 Sensex delivered a negative return for five years. Undoubtedly, Sensex's journey in the last 40 years have been a roller-coaster ride but those who stood invested through the course have ripped the benefit.

The average annual return of the BSE benchmark during these 40 years has been 16%, which is much higher compared to any other asset class like bank FD, real estate, gold, which have generated between 7-12% return during that period.

The ToI report citing Gajendra Kothari, MD & CEO of financial advisory firm Etica Wealth Management said, the Sensex's return over these four decades clearly demonstrates the magnitude of wealth created in the Indian market during these years. “Had a retail investor who didn’t know anything about selecting stocks and had no experience of tracking his investments invested in the index, he would have multiplied his wealth several hundred times,” he said. “For any investor, the Sensex remains the ideal way to make money. By investing in this index, he participates in the India growth story by having an exposure to 30 best companies in the country,” Kothari added.

