Do you wonder where the Indian stock market is headed? A recent report by a stock brokerage house, First Global Securities Ltd, which studied the performance of stock markets across 15 countries, concludes that it may take some more time before the Indian market starts delivering better returns.

The brokerage house compared the returns in each market in three phases—a continuous period of positive returns as well as returns during the three years before and after the best-performing period. It found that almost all the markets, which gave substantially high returns during the “best-performing period”, ended up giving negative returns in the next three years. The performance during the periods before the bull run was generally mixed.

India’s first best-performing period was 1988-92 when the Sensex, the benchmark index, gave a 63% compounded annual return. But, it lost 12% on an annual basis during the next three years. The stock markets of other countries such as the US, the UK, Germany, France and Hong Kong showed similar trends. The next best period in India was the recent bull run, which started in 2003. During 2003-08, it gave a 52% annual compounded return. “On a probability basis, it’s almost impossible that India’s bull run will resume in hurry,” the report says. It indicates that investors shouldn’t expect high returns for the next few years.