MONTHLY ANALYSIS OF THE INDICES AS AT 30-9-2023
In the world of trading and investing, sometimes it is very difficult to separate the two especially when an investor is also a trader. A trader is further categorized into:
- An intraday trader
- A swing trader
- A positional trader
Each category has its own followers and has its unique features and patterns. However, that is not the intention of this post.
The intent of the post and the accompanying video is to highlight the manner in which the indices perform over a longer duration of time. We have all heard the words “helicopter view” or the “30,000 feet view”. When used in the trading and investing world, it relates to the time duration that an amount of money is allowed to remain in the market by a market participant. A 30,000-foot view would be more suitable for an investor or a positional trader.
During the short-term, we witness intense volatility which on some extreme occasions can lead the market participants to act in an irrational manner. And when such situations are either viewed in hindsight or after a period of time, the irrational manner would pop out as the longer the duration, the lesser the volatility.
In the below video, I have explained how the indices have performed over the last 6 months and how things look from what I can see. It is impossible to predict the market behavior for the next day or week, but based on the data, and meaningful analysis, it is possible to logically reason out what is likely to be in store.
As you have seen, even though there were variations in the ROI month over month with Aug 2023 giving a negative return, the indices have on average returned a 9-10% gain during the 6-month period. Assuming that there is a mirror-like performance in the next 6 months the ROI would be around 18% which is a very superior return. On the other hand, even if there is no change in the index levels in the next 6 months, the annual ROI would beat the average Debt Fund or FD returns. At times even MFs do not give such returns and rarely would they exceed 20%+ returns unless one starts “trading” in MF similar to trading in stocks.
I am not saying that MFs are not a good way of investing, but if and have the potential to give such good return on investment, we should make well-informed decisions to ensure that at least some amount of exposure of the investible surplus is allocated directly to the markets.
I hope the above helps.
I have only shared what I have observed and this in no way is a recommendation or an advice, This post as well as the video is purely for informational and educational purposes only.