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Sensex at 100000 (1 lakh): By When?

Dev Ashish

Very recently, the Sensex crossed 50,000 – a psychologically important number for many. As soon as that happened, investors are now becoming greedy for more. So, thrown out are the discussions about what has happened, i.e. Sensex@50,000 (Sensex@50K) and new targets are liberally being doled out.

The next one is 1 lakh.

Yes. That’s right.

Sensex@100000 – OR – Sensex@1 lakh – OR – Sensex@100K

Even though 50,000 or 1 lakh is just a number for the index, the fact that markets are up 100% from March 2020 lows is remarkable because of the ferocity of the recovery.

And this double your money move of 25K to 50K in a matter of months is what has got everyone excited about the next doubling from 50K to 100K. Everyone wants to know when Sensex will double from 50000 to 100000?

So questions being asked are:

To be honest, predicting is a futile exercise as they say. But we can try and make intelligent guesses based on historical data and our own subjective and situational awareness.

So let’s explore the possibility of Sensex @1,00,000. But with caution and the acceptance that we can be very very wrong about the timelines. As for the idea about Sensex reaching 1 lakh in future, its bound to happen no doubt. But when will it exactly happen, is what we attempt to guess intelligently here.

Currently, the bellwether index Sensex (as on 08-March-2021) is at 50,441.

When will the Sensex reach @1,00,000?

So in simple terms, to reach from current levels (of about 50K) to 100K, it needs to double.

Now let’s use the Rule of 72 to approximate the time required for Sensex to double and reach 1 lakh for different average return expectations. We have:

So many possibilities depending on how much returns the markets generate.

And if you look at the historical annual returns of Sensex, then it has varied a lot:

That was about the actual time taken in years for doubling of Sensex from various index levels.

And just if were to assume hypothetically, that Sensex follows the same pace it did after the recovery from March 2020 lows to double by February 2021. If that pace is replicated, then Sensex might double in less than a year! By maybe 2022-23 itself. That would be crazy. Isn’t it? And then the crash of March 2020 would once again seem like a once-in-a-generation opportunity.

But from all the above possibilities, if we stick to a rational range of 10-12% returns from equity over the long term and not be too adventurous about our expectations, then seemingly Sensex@1 lakh will be here by 2027-28. So that’s a way of saying that Sensex could touch 1 lakh level by 2027-28.

But that is just extrapolation of an assumption. It might be right or it might be way off. Who knows. And if returns are much better than that as many expect given the upticks in various economic and financial parameters of the economy, then Sensex might touch 100000 even sooner. Maybe be 2025 or even 2024.

How to invest in Sensex@100000 prediction?

That’s true. I used the word prediction. Because that’s what it is. We can never be sure. But nevertheless, Sensex 1 lakh will come one day no doubt. It might come a little earlier than what we expect or might come a little later than when we expect it to.

So if any of the timelines we discussed about Sensex doubling from 50K to 100 hold true, then investors can make a ton of money. But that is only when they are invested in equities. You can’t be a conservative investor parking money in debt funds or bank FDs and hoping to benefit from Sensex 1 lakh. Isn’t it?

Sensex at 1,00,000 is a real possibility. So what should be your investment strategy? I would say that there are just a few things to make sure when investing in equities and looking to ride to Sensex@100000:

To get yourself a well-thought-through detailed goal-oriented financial plan, that tackles all goals like children’s education, retirement, house purchase, travelling, etc. you can consider professional Stable Financial Planning Service. If you are interested, then head to this page for smart Financial Planning Service. You will increase the probability of achieving your goals on time without stress.

If you are an investor who invests in large-cap stocks (via large-cap funds or index funds), then the index levels hold more meaning for you. You should also look at various index funds in India and decide which amongst the Sensex Vs Nifty you want to pick for passive investing.

So that’s it about Sensex 1 lakh.

I know you and I both want Sensex to reach 100000 as soon as possible. But it will take its own sweet time. So don’t just focus on the destination. Enjoy the journey as well. But the core idea remains the same. If you want to benefit from Sensex@100000, then you need to stay in equities for the long term. I have said this very often and still maintain that equities are likely to remain the best investment option from the long-term perspective.

Predictions about Sensex in 2021, Sensex in 2022, Sensex in 2023, Sensex in 2024 or Sensex in 2025 will be doled out generously by the financial media as they countdown to 100000 for Sensex. But you need to keep a sane head and approach investing in a sensible manner. Only then you will really benefit from Sensex@1lakh whenever that happens.

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