Let’s begin with a graph of the SENSEX over the last 6 years starting from Jan 2008 to Nov 2013 (we are almost at the end of 2013 at the time of writing this article) The first thing that grabs the eye is the fact that the SENSEX has primarily moved sideways over these last six years! There has been one tremendous plunge in the stock index; in late 2008 - early 2009; with an equally impressive recovery after that by end of 2010, followed by 3 years of ups and downs. But when all is said and done, over the last 6 years the SENSEX is still at the same level at the end of 2013 as it was at the beginning of 2008.
So what are the implications of this sideways movement? Are there investment strategies that have worked for you to maintain your portfolio growth over this time? As a long term investor, I do have some funds invested directly in index funds that track the SENSEX. Any funds that I had invested before 2008 have remained at the same level after these six years. If I had just left the money in a bank savings account, I would have got a better return than what I got from the SENSEX index fund! Clearly in this case, the “long term”, atleast over the last six years, has not worked out for me. How about you? How did your portfolio fare over the last six years? What strategies did you use to overcome the sideways SENSEX? Over the next couple of articles I will explore a few strategies that I did use, and some that I should have used, to compare and contrast their performance using the last six years index as a reference.