{"id":2098673,"date":"2019-01-30T12:05:35","date_gmt":"2019-01-30T06:35:35","guid":{"rendered":"http:\/\/stockviz.biz\/index.php\/?p=2098673"},"modified":"2019-01-30T12:05:35","modified_gmt":"2019-01-30T06:35:35","slug":"the-futility-of-market-timing","status":"publish","type":"post","link":"https:\/\/stockviz.biz\/index.php\/2019\/01\/30\/the-futility-of-market-timing\/","title":{"rendered":"The futility of market timing?"},"content":{"rendered":"

We recently came across an article put out by Albert Bridge Capital titled the “The futility of market timing.” You can read it here<\/a>. The authors use the S&P 500 index to show that the gap between perfect market timing (always buying at the lows) vs. the worst market timing (always buying at the highs) doesn’t matter over long periods of time (20+ years.)<\/p>\n

We were curious about how returns from the NIFTY 50 would look like if we ran the same experiment. We looked at consecutive 10- and 20-year rolling periods starting from 1991 where an investor buys Rs. 1 lakh of the index every year at <\/p>\n

    \n
  1. the highest level of that year (H)<\/li>\n
  2. the lowest level of that year (L)<\/li>\n
  3. some random day (R)<\/li>\n<\/ol>\n

    We added the random scenario (#3) because that is more-or-less the opposite of trying to time the market.<\/p>\n

    10-year rolling-period returns<\/strong>:
    \n    \"nifty.market-timing.10.annual\"<\/a>
    \n20-year rolling-period returns<\/strong>:
    \n    \"nifty.market-timing.20.annual\"<\/a><\/p>\n

    Unlike the S&P 500, the NIFTY 50 has been an extremely volatile beast. And given the wide gap in terminal wealths, there is always going to be a temptation to try and time the NIFTY 50. <\/p>\n

    Code on github<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

    We recently came across an article put out by Albert Bridge Capital titled the “The futility of market timing.” You can read it here. The authors use the S&P 500 index to show that the gap between perfect market timing (always buying at the lows) vs. the worst market timing (always buying at the highs) … <\/p>\n","protected":false},"author":2,"featured_media":2091813,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3471],"tags":[],"class_list":["post-2098673","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing-insight","entry"],"_links":{"self":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2098673","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/comments?post=2098673"}],"version-history":[{"count":0,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/posts\/2098673\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media\/2091813"}],"wp:attachment":[{"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/media?parent=2098673"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/categories?post=2098673"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/stockviz.biz\/index.php\/wp-json\/wp\/v2\/tags?post=2098673"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}