Flawed assumptions and unrealistic projections about investments in equity market can jeopardize your financial planning.

Here’s what to expect from equities and to ensure that you reach your goals.

The Sensex has given a CAGR of 11.2% in the past 5 years and 15.69% in the past 10 years. The growth will not be as high in the coming years, though much will depend on how the economic environment shapes.

1) Best Scenario: GDP growth picks up and India regains its stature and investment destination. Expect around 12-15% returns.

2) Moderate Scenario: Economic growth slows down but remains above 5%. Expect around 8-10% returns.

3) Bleak Scenario: GDP growth dips below 5% and corporate profits stagnate. Expect around 4-5% returns.

4) Worst Case Scenario: Economy shrinks and goes into recession. Below 4% or even negative returns.

SOURCE: TOI EDITORIAL 04/11/13

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