Nifty Continues Breaking All Time High!
The unstoppable record run continues for be-nchmark indices! Sensex mo-unted on the 85,900-mark for the first time, and Nifty touched 26,250.
NIFTY is currently in a positive trend and fresh short position can be initiated if NIFTY closes below 25915 levels. Monthly options data suggest that Nifty could face resistance at 27,000 in the medium term, while the short-term level to watch is 26,500, with immediate support at 25,900.
The index finally settled well above the rising resistance trendline and maintained its higher highs-higher lows formation for another session. In the coming sessions, there is a possibility of short-term consolidation or a breather before the index moves up further.
For readers who are worried about All time high markets
All Time Highs are a natural part of any growing asset class and not something to be feared. All Time Highs automatically don’t imply a market fall. The average 1Y returns when invested in Nifty 50 during an all-time high, is ~14%.
Equity markets witness 10-20% temporary declines almost every year. Despite an intra-year decline of more than 10% almost every year, 3 out of 4 years ended with positive returns.
Temporary market declines of 30-60%, historically have occurred once every 7-10 years. Even if you invested right before a market crash, over long time frames, the returns have still turned out to be decent.
Over the Long Term (10-15 years) Equity has provided returns above inflation, Long Term Return Expectation = Inflation + 4 to 6%, but 10-20% decline happens almost every year, 30-60% Decline should be a part of expectation for every 7-10 years.
Robins Joseph, SEBI Registered Investment Adviser, Certified Financial Planner. Founder of MyGuide2Wealth (www.myguide2wealth.com) based in Noida, specializing in wealth, investment, and retirement services with the clear aim of spreading financial literacy and advocating on India’s strong equity story.