I had earlier provided a chart of the Nifty since 2000, adjusted for inflation, including dividends and without.
A cleaner way to look at the index is to “adjust down” for inflation every month (using a monthly index). I have assumed about 9.5% for November and 9% for December (we only have WPI monthly data till October).
We are effectively at the lowest levels since April 2009. (If you recall,the index shot up 15% in May after the elections).
More importantly, look at the dead zone between May 1994 to May 2004 – net of inflation, you earned nothing (in fact inflation adjusted returns were negative till October 2004).
Worse: In the 17 year period that the Nifty has existed, the return, net of inflation, is 55%. The long term return of the Nifty, net of inflation, is 2.6%.
Those retirement plans that assume 15% equity returns need some rethinking.
