A blind purchase of all stocks in the Nifty 10 years ago still beat the returns of the Nifty. But obviously we can’t say this happens all the time; we’d have to test different time frames (10 years, 5 years etc) and different start and end points). This is not the point we want to make.
The point is: Most of your money was made in the big winners – so much that they overrode the losers, to even beat index returns in the meantime. So when some stocks go to zero, don’t fret!
The point is: Most of your money was made in the big winners – so much that they overrode the losers, to even beat index returns in the meantime. So when some stocks go to zero, don’t fret!
- Three stocks lost over 80% in absolute terms.
- Three more stocks lost more than 40%.
- A Further five other stocks saw their stock prices contract (sub-zero-percent returns) in the last 10 years.
- That’s 11 stocks out of 50 that gave you returns lower than zero!
- And yet, you beat the index.
