Indian stock markets have surged to unprecedented levels, creating both excitement and anxiety among investors. As benchmark indices touch new peaks, many are questioning whether they should pause their systematic investment plans. However, historical data and expert analysis suggest that stopping investments at market highs could be a costly mistake for long-term wealth creation.
Historical Evidence Supports Continuing Investments
A comprehensive analysis of the Nifty 50 Total Return Index from 2000 to 2025 reveals compelling evidence for maintaining investment discipline. The research shows that investing when markets are at all-time highs has historically delivered average one-year returns of nearly 13%. More importantly, the returns over three and five-year periods remained strong at approximately 12%.
The probability analysis provides even greater comfort to investors. There's a 77% chance of generating positive returns after one year, with a 34% probability of achieving returns exceeding 20%. Most significantly, the study found zero instances of negative returns over any five-year investment horizon when maintaining regular contributions.
Expert Views: Strong Fundamentals Support Market Levels
Vaqar Javed Khan, senior fundamental analyst at Angel One, emphasizes the resilience of Indian equities. "Nifty has never delivered a negative five-year rolling return thanks to India's structural growth and resilient earnings," he states. Khan points to expected corporate profit growth of about 15% over FY25-27 and notes that the index trading at a one-year forward price-to-earnings ratio of 19.5 remains close to its long-term median.
Vikram Kasat, head of advisory at PL Capital, echoes this optimism. "It's a good time for investors to enter the market," he says, highlighting supportive factors including festive demand, strong domestic sentiment, and potential US-India trade deal optimism. His analysis suggests the Nifty could reach 28,781 within twelve months, representing 10-11% upside from current levels.
Broader Market Presents Selective Opportunities
Despite headline indices reaching record levels, the market rally remains uneven. Analysis of 4,149 BSE-listed companies reveals that over 80% of stocks trade below their 52-week highs. Approximately half of these have declined between 25-50%, while only 8.2% of companies are within 10% of their yearly peaks.
Thomas V Abraham, fundamental analyst at Mirae Asset Sharekhan, maintains that India's structural growth story remains intact. "Indian valuations have historically been higher than global peers, yet markets have delivered long-term returns of 12-13%, driven by sustained economic growth," he notes. With FY26 GDP growth expected between 6.6% and 6.9%, India continues to outpace major global economies.
Strategic Approach for Current Market Conditions
G. Chokkalingam, founder of Equinomics Research, provides clear guidance for investors concerned about current valuations. "Yes, even now one can invest in the Nifty, Sensex, or a diversified basket of large-cap stocks," he asserts. His projection suggests Nifty and Sensex earnings could rise by about 50% over the next five years, potentially translating into minimum returns of 50% for patient investors.
Experts recommend focusing on growth-oriented sectors including banking, telecom, and automobiles, which are expected to lead the next phase of market expansion. For investors worried about near-term volatility, systematic investment plans remain the preferred approach to average out purchase prices and benefit from market fluctuations.
The consensus among analysts is clear: while market peaks naturally trigger caution, historical data and India's strong economic fundamentals support continued investment discipline for those with long-term horizons.
