The best answer that most of us can give is “I do not know”.

However, given the caveat, let us look at where it could be headed.

Currently the market is assuming that NaMo will win and therefore the status quo will continue. The 38000 Sensex (could it be 39000 by the time the results come?) is making that assumption.

In case NaMo comes back to power (BJP 280 seats, NDA 300+) – the market could fall a little – say to 36000. This is what we call “buy on rumors, sell on news) and then it could go back to 38000 in say 3 months time. It is a time when FII could invest more in debt and in equities too.

In case Namo does not come back (BJP less than 175) – and the opposition comes to power the market is likely to correct much more. Maybe it will hit 32000 before it recovers. Market will fall, and the EPS starts improving, market will then say “hey this is not so bad” and the recovery process could bring it back to say 38000 in 12 months time. This time it would be helped by good news on the EPS front. Indicators like inflation, etc. will not be too bad immediately, but the macros could start worsening, US $ could strengthen against the rupee, and there could be some more bad news. However those companies which draw most of their money from overseas operations could recover – like Hindalco, TaMo, TCS, Infy….and could be the market leaders.

In any case both these scenarios will not matter. Let us assume that the sensex ends at 38500 on 31st March, 2019. If we are asking where will the markets be in 2020 March, the answer is “I do not know”.

However, if you are asking me “what is the return that my equity portfolio is oing to get over the next few decades…the answer is this:

Nominal growth of say 8% + inflation of about 4% – about 12% is what one should expect over longish periods. Forget the 22% LT returns of some of the top funds. Those were the days with higher inflation, and hence higher returns  – that is history!