Forget 20% Returns, 12-14% Is New Normal: Amar Ambani Issues Wake-Up Call Even As Markets Peak

Investors' portfolios are officially entering a new era of moderation, and the decade of easy 20%-plus annual stock market gains is officially over, according to market veteran Amar Ambani, Head of Institutional Equities at YES Securities.

Though the era of easy 20%-plus returns may be over, the long-term India growth story remains "not broken," according to the detailed outlook from Ambani, on X.

Ambani spotlighted some of the unusual elements that 2025 witnessed in terms of US equities seeing their steepest underperformance in 16 years. Despite this, the capital flows into emerging markets are well above the historical average.

He pointed out that Indian equities have trailed emerging market peers the most in 25 years. The expert pointed out that global investors have now crowded into AI trade and India is seen as an anti-AI market that was already trading at high valuations.

Adding to this, India has been among the worst-hit by Donald Trump's tariffs, and a depreciating rupee has added to the pressure. Ambani also noted that though domestic money has held up index levels, a big part of that has gone into primary issuances rather than the secondary market.

The expert then pivoted onto the brightside - noting that earnings have surprised on the upside. And in terms of stock ratings, downgrades have reduced, and upgrades have gone up.

Consumption has been boosted by tax cuts, GST cuts and better liquidity in the system. He also brought into focus inflation that is at its lowest levels in years. This should allow the RBI to cut rates, with the Fed expected to move in the same direction.

The market expert also expected private capex to pick up gradually, helped by roughly Rs 1.5 lakh crore of fresh primary market proceeds over the last two years.

The final point in this case is that, after a long phase of price and time correction, he noted that the sentiment can turn faster than most people expect. A trade agreement is still a possibility, and several FTAs are in the pipeline, he added.

Now, given the two sides of this coin, what should the retail investors do? Ambani had answers that are hopeful and yet realistic.

"Do not write off India because of one difficult phase. Do not expect a repeat of 20%+ annual returns that you saw for 3 years in a row. Reset expectations to around 12–14% for next 12 months, which is still healthy. Stay focused on earnings, balance sheets and asset allocation, not just headlines," he posted.

Calling this year a test of patience more than intelligence, he called for investors to stay realistic on returns, and disciplined on their approach. This phase will feel like a pause, not an end, he concluded.