In the last 5 Years, Nifty 50 has given 110% returns which means it has given around 20% every year if we take an average when we buy and hold. Whereas if we buy and sell, again buy then it has given around 270% returns. 2 days back, I have shared that I am working on a theory, this was the theory and thus I ran the backrest result for 5 years and found out that we do the trading we get around 2.5X more returns.
I have created the video where I have shown how I have backtested it and also how you can use the Google sheet to track the investment. I have created the Google sheet for this tracking only. We will be using the Nifty 50 Index only, because our motto is to beat the index. If we can beat the index then we are good. And wveb if we can get 1-2% more returns than Nifty Index, that's actually a very good returns and you will see the effect later in portfolio.
So coming back to the strategy, we will buy 1/10th of the total capital whenever the Nifty 50 falls by more than 1%. And we will sell it once it reaches 6% with profit. In that way we are actually trading as well making use of the capital I.e. capital rotation instead of just buying and holding. I know buy and hold is a good stratgey but when we can trade with same risk but more reward than why not do it and earn good profit.
To be honest, I will start using it rather than only investing in the Nifty 50 to see how it goes and how good returns it can generate in the next 1 year.
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