Sensex @ 90,000+ in 2020...

The Indian equity markets have already give more than 20% in just 3 months of the newly elected Modi government. The Modi government is bringing fresh interest of overseas investors in India, with a strong mandate and a stable government, it is expected that the decisions will be faster and there will be focused approach to development in areas of Manufacturing, infrastructure , ports , power sector, education and healthcare.

The world has started to come closer to India. Japan, China, Vietnam, Russia, UK, Australia and even the US, every country wants special relations with India. US recently decided to send an Indian as an ambassador to India. With billion dollars of investments already announced by these countries in India, the GDP is set to break the double digit figures soon and is expected to stay in the range above.

The global investors confidence has increased in India , which is evident with the FII flow in the last 3 months of Modi government. The Indian retail investor is yet to participate.

The million dollar question is where will the Sensex end ? Few have already started estimating it at 100000 in 2020, few speculating 50000 in 2016, but is there enough steam in the Indian indices, can it really reach at these levels ?

The answer is YES it can, i did a small analysis of the returns given by BSE SENSEX, NSE NIFTY since 1990. Indian equity markets have a small history, so have also studied the returns given by the DOW JONES INDUSTRIAL AVERAGE INDEX since 1920, and the results are astonishing as below:

RETURN OF DOW JONES INDUSTRIAL AVERAGE

Year	DOW JONES	Absolute Return (%)
1920	100	Base Index
1940	150	150%
1960	680	453.33%
1980	1000	147%
1990	3000	300%
2000	11500	383.33%

Avergare Return Till Date:

287%

If we assume the average return DOW JONES will be around 33,000 in 2020.

RETURN OF NSE NIFTY 50

Year	Nifty	Return (%)
1994	1000	Base
2000	2100	210%
2010	6200	295.23%

If on a conservative basis we take the average return of NSE NIFTY, it will be 18,400 in 2020.

RETURN OF BSE SENSEX

Year	SENSEX	Returns (%)
1990	1000	Base Index
2000	6000	600%
2010	20000	333.33%

On a conservative basis , with the average return, SENSEX will be around 90,000 in 2020.

India is best placed as an economy and stable government as compared to the period between year 2000-2010, the markets can be in the best of the bull phases of Indian history. 

Investing in right sectors and right stocks will surely give the best returns, start investing. 

How to invest in High Markets ?

As the equity market is touching new highs there are more and more people who are finding themselves interested in the markets. The obvious reason behind this new interest is the amount of returns that other people are getting from the markets and the temptation getting buildup in the mind of others who are not getting the same. This is not a new thing every time the market goes up there are people who come in. They are the ones who become the buyers for those who are already in. These new buyers buy shares at high prices and when they go to sell these shares there is no one to buy these shares, Result? Markest crashes. These new people in such cases get out and book losses. These are the only people who spread a bad word for the market and start saying that the market is a gamble. If you are entering the market like these people please read ahead.
Markets are still very highly valued. So the possibilities of market crash are higher. So if you are planning to invest at these levels study the stock well first. But frankly it is not possible for everyone. so there are two way outs.

1)Intra day trading: Many people think it as a gamble. But it is not so. In case of gamble there is no logic for winning. but in trading there are many logical considerations if you understand at least a few of them you can find out the best stock for that day put your money on it. The best thing for intraday is that you can buy up to 15 times of your actual capacity(depending upon the margin provided by you broker) whereas in case of delivery based you can buy only as much as the funds available with you. So in intraday trading your broker invests more money on your behalf hence you are liable to pay only the loss if the same occurs if your call is correct and you gain, you are not required to pay even a singly paisa on the contrary the market pays you the entire profit. Another best thing about the Intra day trading is that you can sell the shares first and buy them in the evening. This is commonly called as shortselling, which is not allowed for Delivery basis. Again there are some other benefits like less brokerage etc.
Only drawback of intra day trading is that you have to give a lot of time to it and need to have some qualities like general information about current afairs, loss bearing capacity etc.

2)Mutual Funds:The second option is divert your money in the form of Systematic Investment Plan(SIP) to professional fund managers through Mutual Funds. Due to SIP you will get the benefit of falling and will be able to get the advantage of Falling Markets by reducing your average price,
So both the ways are available. Now the choice is yours.

Rgds.,
Japan Shah