When we invest in wealth compounding stocks,they rise much more than Index and in correction they fall much less than the index.Over a long period all the ups and downs in the market get smoothened out.
To quote from Diamonds In The Dust, Rs 1 invested in Asian Paints stock in 2000 has grown to Rs 150 today (excluding the dividends) where as the same Rs 1 invested in Sensex has become Rs 12 which means Rs 10000 invested in Asian Paints have become Rs 15 Lacs today whereas same amount invested in Sensex is worth Rs 1.2 Lakhs only......and it has taken all rallies and declines/crashes in its stride to give us handsome returns.....