Trailing 5 Year, 3 Year and 1 Year returns are strong indicators of future returns.
As a thumb rule, other factors remaining constant, equity returns are commensurate with nominal GDP returns. In Indian context, nominal GDP growth is around 12-13% (@7% real GDP growth and @ 5% inflation). In the long run, equity returns are expected to converge around this level. Whenever, trailing returns diverge widely from 12-13% for a longish bit of time, the future returns fall/rise to bring the average returns back to that range.
