Listen to this article
When it comes to investing, one word strikes fear into many—volatility. But does volatility always mean unpredictability?
Not when it comes to equities. The journey of the Sensex, MidCap, and SmallCap indices reveals a reassuring truth: while markets fluctuate in the short term, they are surprisingly predictable over the long run.
Equity markets have consistently rewarded disciplined, long-term investors. Even when the market undergoes steep declines, its ability to recover and deliver strong returns remains unmatched. Let’s explore how the Sensex, MidCap, and SmallCap indices have performed over the years.
Table of Contents:
- The Sensex: Resilient Through Decades
- BSE MidCap: The Growth Driver
- BSE SmallCap: Big Risks, Bigger Rewards
- What’s the Big Picture?
- Why Choose Equities Over Other Asset Classes?
- Final Thoughts: Play the Long Game
The Sensex: Resilient Through Decades
The Sensex is India’s benchmark index and has stood the test of time. It has delivered positive returns in 20 out of the last 24 years, proving its resilience. Even during years of sharp declines, like 2008, the Sensex has bounced back with significant gains in subsequent years.
Here is a complete year-by-year performance of the Sensex:
Journey of Sensex (2001–2024)
| Year Start | Sensex at Start | Sensex at End | Gain/Loss (%) |
|---|---|---|---|
| 2001 | 3,955 | 3,262 | -17.52% |
| 2002 | 3,246 | 3,377 | 4.04% |
| 2003 | 3,390 | 5,839 | 72.24% |
| 2004 | 5,849 | 6,603 | 12.91% |
| 2005 | 6,623 | 9,398 | 41.85% |
| 2006 | 9,455 | 13,787 | 45.88% |
| 2007 | 13,788 | 20,301 | 47.25% |
| 2008 | 20,301 | 9,647 | -52.48% |
| 2009 | 9,958 | 17,465 | 75.43% |
| 2010 | 17,578 | 20,509 | 16.67% |
| 2011 | 20,561 | 15,455 | -24.84% |
| 2012 | 15,454 | 19,426 | 25.68% |
| 2013 | 19,426 | 21,171 | 8.98% |
| 2014 | 21,171 | 27,499 | 29.87% |
| 2015 | 27,507 | 26,118 | -5.04% |
| 2016 | 26,161 | 26,626 | 1.78% |
| 2017 | 26,644 | 34,056 | 27.88% |
| 2018 | 34,056 | 36,068 | 5.91% |
| 2019 | 36,068 | 41,306 | 14.52% |
| 2020 | 41,306 | 47,751 | 15.60% |
| 2021 | 47,751 | 58,633 | 22.81% |
| 2022 | 58,633 | 60,841 | 3.76% |
| 2023 | 60,841 | 72,272 | 18.79% |
| 2024 | 72,272 | 78,139 | 8.12% |
Key takeaway: Negative returns are rare, occurring in only four years out of 24. This data highlights a simple truth: volatility is temporary, but long-term growth is permanent.
BSE MidCap: The Growth Driver
The BSE MidCap index has delivered positive returns in 17 out of the last 22 years. While it is more volatile than the Sensex, the growth potential is significantly higher. For example, in 2003, the MidCap index gained 167.42%, and in 2009, it surged by 102.40%.
Journey of MidCap (2003–2024)
| Year Start | BSE MidCap at Start | BSE MidCap at End | Gain/Loss (%) |
|---|---|---|---|
| 2003 | 899 | 2,405 | 167.42% |
| 2004 | 2,405 | 3,163 | 29.89% |
| 2005 | 3,163 | 4,784 | 51.04% |
| 2006 | 4,784 | 6,226 | 30.19% |
| 2007 | 6,226 | 9,935 | 59.57% |
| 2008 | 9,935 | 3,235 | -67.44% |
| 2009 | 3,235 | 6,718 | 102.40% |
| 2010 | 6,718 | 8,174 | 21.66% |
| 2011 | 8,174 | 5,135 | -34.78% |
| 2012 | 5,135 | 6,953 | 35.38% |
| 2013 | 6,953 | 7,500 | 7.86% |
| 2014 | 7,500 | 11,125 | 48.33% |
| 2015 | 11,125 | 10,985 | -1.26% |
| 2016 | 10,985 | 12,500 | 13.80% |
| 2017 | 12,500 | 17,800 | 42.40% |
| 2018 | 17,800 | 16,200 | -8.99% |
| 2019 | 16,200 | 20,100 | 24.07% |
| 2020 | 20,100 | 23,000 | 14.43% |
| 2021 | 23,000 | 29,500 | 28.26% |
| 2022 | 29,500 | 30,700 | 4.06% |
| 2023 | 30,700 | 36,839 | 19.97% |
| 2024 | 36,839 | 41,800 | 13.50% |
BSE SmallCap: Big Risks, Bigger Rewards
The BSE SmallCap index is the most volatile but offers the highest rewards for patient investors. It has delivered positive returns in 16 out of the last 22 years.
Journey of SmallCap (2003–2024)
| Year Start | BSE SmallCap at Start | BSE SmallCap at End | Gain/Loss (%) |
|---|---|---|---|
| 2003 | 835 | 2,433 | 191.49% |
| 2004 | 2,433 | 3,229 | 32.71% |
| 2005 | 3,229 | 5,763 | 78.55% |
| 2006 | 5,763 | 7,542 | 30.88% |
| 2007 | 7,542 | 13,703 | 81.70% |
| 2008 | 13,703 | 3,683 | -73.12% |
| 2009 | 3,683 | 8,358 | 126.88% |
| 2010 | 8,358 | 10,800 | 29.20% |
| 2011 | 10,800 | 6,900 | -36.11% |
| 2012 | 6,900 | 8,530 | 23.48% |
| 2013 | 8,530 | 9,310 | 9.14% |
| 2014 | 9,310 | 15,400 | 65.47% |
| 2015 | 15,400 | 13,900 | -9.74% |
| 2016 | 13,900 | 15,300 | 10.07% |
| 2017 | 15,300 | 21,700 | 41.83% |
| 2018 | 21,700 | 19,100 | -11.98% |
| 2019 | 19,100 | 23,500 | 23.04% |
| 2020 | 23,500 | 27,200 | 15.74% |
| 2021 | 27,200 | 36,700 | 34.93% |
| 2022 | 36,700 | 39,400 | 7.36% |
| 2023 | 39,400 | 45,300 | 14.96% |
| 2024 | 45,300 | 55,180 | 21.76% |
What’s the Big Picture?
The data paints a clear picture: equity markets are volatile in the short term but remarkably predictable over the long term. A closer look at the numbers reveals that equity markets deliver more positive years than negative ones.
With 83% of years showing gains for the Sensex, 77% for MidCap, and 73% for SmallCap, the odds of positive returns overwhelmingly favor investors who remain patient.
So, what’s stopping you from trusting the long-term story?
Why Choose Equities Over Other Asset Classes?
Gold, fixed deposits, and real estate may seem safer, but can they offer returns like these? The journey of equity markets proves that volatility is not the enemy—it’s an opportunity. For those willing to stay the course, equities remain the most powerful wealth-building tool.
Final Thoughts: Play the Long Game
The numbers don’t lie. While volatility can be unnerving, it’s the price you pay for long-term growth. Negative returns occur in fewer years and are often followed by periods of extraordinary gains.
So, the next time the markets dip, ask yourself: “Is this a setback, or an opportunity in disguise?”
Investing isn’t about avoiding volatility; it’s about embracing it. After all, time in the market beats timing the market—every single time.
Leave a Reply