Key Points

Gold, meanwhile, slightly outperformed equities with a 14.7 per cent CAGR, growing 16 times during the same period.

In comparison, real estate and the debt market generated more modest returns, compounding annually at 7.7 per cent and 7.5 per cent, respectively, over the last two decades, FundsIndia highlighted in its 'September Wealth Conversation Report'.

Looking at a longer horizon, domestic equities have fared even better, delivering a 13.6 per cent CAGR over 35 years and multiplying wealth by 88 times.

Globally, the US equity benchmark S&P 500 returned 14.7 per cent CAGR, multiplying investor wealth by 15.6 times in the past 20 years.

Within India, mid- and small-cap stocks emerged as the biggest wealth creators. The Nifty Smallcap 250 delivered a 14.2 per cent CAGR, growing 14 times in two decades, while the Nifty Midcap 150 surged at 16.2 per cent annually, multiplying wealth by 20 times. By comparison, large-cap stocks, represented by the Nifty 100, compounded at a 13.9 per cent CAGR and multiplied 13.6 times over the same period.

The report also emphasised the importance of long-term investing. The probability of negative returns was as high as 43 per cent for intraday trades in Nifty50 stocks, 39 per cent for one-month holdings, 31 per cent for three-month holdings, and 23 per cent for one-year holdings. However, this risk dropped significantly over longer horizons: just 6 per cent for three years, 0.1 per cent for five years, and became NIL for holding periods of seven to ten years.

According to the report, 73 per cent of the time, Indian equities (Nifty 50) have doubled in 6-7 years and 80 per cent of the time, Indian equities have tripled in 10-11 years. Moreover, 76 per cent of the time, Indian equities have multiplied 4 times in 12-13 years.

- IANS