Two years of a market that has gone nowhere is genuinely tiring. The Nifty sits about 11% below its January 2026 high and roughly where it was two years ago. If you feel restless, you are not being irrational — this is a real time-and-price correction, and the frustrated messages doing the rounds are right on the surface.
They are also incomplete in every way that matters for someone investing for seven or ten years. This note fills in what they leave out — facts first, feelings second.
Where we actually are
| Measure | Reading (late Sep 2026) | What it means |
|---|---|---|
| Nifty 50 | ~23,400 | ~11% below its all-time high of 26,373 (5 Jan 2026) |
| Nifty 50 P/E (trailing) | ~19.5x | ~10% below its 5-year median (~22x), ~15% below its 10-year average |
| Monthly SIP inflow | ₹32,297 cr (Aug 2026) | A record month; 10.75 crore live SIP accounts |
| FPI equity flows | –₹2.8 lakh cr (H1 2026) | The largest first-half foreign outflow on record |
| DII equity flows | +₹4.3 lakh cr (H1 2026) | A record; absorbed ~90% of the foreign selling |
| 10-yr G-Sec yield | ~7.1% | A four-month high; a rate rise was expected at the 7 Oct meeting |
The one question worth asking is not “could India be flat for 17 years?” but “are the conditions that cause a 17-year freeze actually present today?” Everything below builds to that two-condition test.
The 1964–81 Dow story — taken seriously, and then completed
The figures being circulated are real. They come from Warren Buffett’s 1999 Fortune essay: the Dow closed 1964 at 874.12 and closed 1981 at 875.00. Seventeen years, zero price movement — while US GNP grew about 370%.
Why it happened: long-term US government bond yields rose from just over 4% at the end of 1964 to more than 15% by late 1981. When the government bond rate nearly quadruples, every other asset must re-price to compete. Corporate earnings roughly tripled, but the P/E multiple collapsed — and the two forces cancelled out. Price = Earnings × Multiple; earnings rose, the multiple fell, price went sideways.
The Dow went nowhere for 17 years — then rose more than tenfold
Source: Buffett, Fortune (1999). The investor who quit in 1981, exhausted, walked out on the greatest bull market in history.
The flat index is a price line; a systematic investor’s outcome is a cash-flow story — and in those seventeen flat years, every instalment bought units at prices that never ran away, which then multiplied tenfold.
The honest lesson, stated precisely: a market can go nowhere for a very long time when TWO conditions hold together — starting valuations are stretched, AND interest rates rise relentlessly for years from a low base. That is a real risk, not a myth.
India has been here before — three times
| Flat period | What happened | What followed |
|---|---|---|
| 1992 → 2003 | Sensex ~4,500 (Apr 1992) to ~3,000 — an eleven-year “lost decade” | Rose ~7x to 21,000 by Jan 2008 |
| 2008 → 2013 | Nifty ~6,350 (Jan 2008), not regained until late 2013 — with a 60% crash in between | Rose ~4x to 26,000+ by Sep 2024 |
| 2013 itself | FIIs exiting, rupee at a record low, RBI hiking, “Fragile Five”, exhausted retail | Nifty rose 50%+ in the next 15 months |
August 2013 is the year that reads most like today: foreign investors pulling out heavily, the rupee at a then-record low, the RBI raising rates to defend the currency, inflation near double digits, and retail investors exhausted after three flat years. The payoff for staying arrived precisely when staying felt least sensible.
“GDP is growing but the market is flat” is the repair process, not a contradiction
Here is the arithmetic with India’s own numbers. Between the September 2024 peak and now, the Nifty fell about 10% while its trailing P/E fell from ~24x to ~19.5x. Back out the earnings and they actually GREW about 11%.
| Sep 2024 (peak) | Sep 2026 (now) | |
|---|---|---|
| Nifty level | ~26,000 | ~23,400 (–10%) |
| Trailing P/E | ~24x | ~19.5x (–19%) |
| Implied earnings | ~1,083 | ~1,200 (+11%) |
Earnings grew ~11%. The market fell ~10%. The multiple did the rest. That is not the economy failing — it is a market that got ahead of its earnings in 2024 quietly letting the earnings catch up and overtake it. Every rupee of earnings now costs about 19% less than it did two years ago.
The de-rating has already happened — Nifty 50 trailing P/E
The market is now cheaper than its own recent history — below both its 5-year median and its 10-year average.
The two-condition test: is India 2026 the US of 1964?
Condition 1 — Is the starting valuation stretched?
In September 2024, arguably yes. In September 2026, no. At ~19.5x the Nifty is below its own 5-year and 10-year averages. The US 1964 investor stood at the START of a de-rating; the India 2026 investor stands two years and ~19% of multiple compression INTO one. Much of the digestion a flat market exists to perform has already happened.
Condition 2 — Are rates rising relentlessly, for years, from a low base?
This deserves an honest answer. Rates ARE firming: the 10-year G-Sec is near 7.1%, crude has been above $100, and a repo-rate rise was on the table. Oil and West Asia are real risks and this could get uncomfortable before it gets better. But scale is everything.
The scale of the rate move is nothing like 1964–81
The US saw an ~11-percentage-point rise sustained over 17 years. India starts near 6.5% with CPI under 5% and a 4% target — a quarter or half point is a different animal.
Verdict: one of the two conditions has largely already resolved (valuations have de-rated); the other is present only in a much milder form and is the thing to watch. That is a materially better position than the forwarded message implies.
“FIIs are exiting” — yes, and look at what did NOT happen
Foreign investors sold a record ₹2.8 lakh crore of Indian equities in H1 2026. In 2008, foreign selling of a fraction of that size (~₹50,000 cr) took the market down about 60%.
| 2008 | 2026 (H1) | |
|---|---|---|
| Foreign selling | ~₹50,000 cr | ~₹2.8 lakh cr (5x more) |
| Market fall | ~60% | ~11% |
| The difference | No domestic buyer | DIIs bought ₹4.3 lakh cr; ₹32,000 cr/month of SIPs |
Domestic institutions absorbed about 90% of the foreign selling. Behind them stands a monthly SIP flow that simply did not exist in 2008 or 2013 — a buyer that shows up every month regardless of headlines. Foreign money sells for global reasons more often than Indian ones, and it has come back after every previous exit: 2008, 2013, 2020, 2022.
The real risk is not the market — it is behaviour
Axis Mutual Fund studied every rupee that went into Indian equity funds from 2003 to 2022. The funds delivered far more than the investors in them actually captured — because investors added money after rallies, exited after falls, chased the hot fund, and stopped SIPs during corrections.
The behaviour gap: what the funds returned vs what investors kept (2003–2022)
Annualised returns. Compounded over 20 years, that ~5-point gap is the difference between about ₹3.2 crore and ₹1.3 crore on the same ₹10 lakh.
Note where the crowd is going right now: August 2026 saw record inflows into small- and mid-cap funds while large-cap funds saw outflows — even though large-caps are where the multiple has compressed most. The question is not which segment is right, but: is my allocation being driven by a plan, or by the last twelve months’ returns?
Time is the only edge that costs nothing
Look at the Nifty 50 Total Return Index across every rolling window since inception:
| Holding period | Weakest window | Typical window | Strongest window |
|---|---|---|---|
| 1 year | Deep losses possible (–50%+) | Wildly variable | +100% |
| 10 years | ~5–6% a year — never negative | ~14% a year | ~22% a year |
No ten-year window in the Nifty’s history has lost money — including windows that began at the January 2008 peak. So the question is never “will this year be good?” It is: “is this money genuinely 7–10-year money?” If yes, the current level is a purchase price, not a verdict.
What to do — a process, not a prediction
- Do not stop the SIP. A correction is when a SIP does its real work — the same instalment buys more units. If your income has grown, step it up rather than pause it.
- Bucket every rupee by when you need it. Money needed within ~3 years should not be in equity at all. Only 7-year-plus money should feel a two-year flat patch.
- Rebalance to your target allocation — do not abandon it. If equity drifted below target because of the fall, the plan says top up.
- Judge progress against your goals, not the index headline. Your number is the XIRR on your own cash flows toward your goal.
- Do not chase last year’s category. Prefer diversified and asset-allocation mandates over concentrating into whichever narrow segment has the most flows this month.
- Keep the emergency fund untouched so no SIP ever has to be broken for a short-term need.
- Ask for a review. Twenty minutes against goals and horizon with your Trustner Relationship Manager settles more anxiety than any amount of market commentary.
The five things to carry away
Not sure whether your allocation still fits your goals?
Get an honest, goal-first review of your portfolio with the Trustner team.
Disclaimer
This article is investor education and market commentary; it is general in nature and does not constitute investment advice or a recommendation to buy, sell or hold any security, sector, category or scheme, nor a forecast of returns. Index levels and ratios are approximate, rounded and as of the dates cited, and move daily. Past performance is not indicative of future results; an index cannot be invested in directly. Mutual fund investments are subject to market risks; read all scheme-related documents carefully, including the product riskometer, before investing. Trustner Asset Services Pvt. Ltd. is an AMFI registered Mutual Fund Distributor and SIF Distributor, and an APMI registered PMS Distributor (ARN-286886), and earns distribution commission on Regular plans; it is not a SEBI Registered Investment Adviser. For tax or personal financial matters, consult a qualified professional.
Tags
Ram Shah is a FPSB-certified CFP professional and founder of Trustner Asset Services (ARN-286886). With over two decades of experience in wealth management, he specializes in SIP strategies, retirement planning, and goal-based investing for Indian families.