Apply Sector Rotation in Your Investment Strategy

Today’s Daily Byte

The NASDAQ cracked very, very hard last night, down 4%. The S&P 500 also dropped multiple percentage points. Tesla fell 15%, and Amazon, Apple, Nvidia, Palantir were all down in a big way. It seems that liquidity is finally leaving the US markets, at least not going in any further. The Dollar index is collapsing, and US yields are coming down. All this should help India.

We started the day at a gap down, but Nifty recovered entirely, and we ended up where we were yesterday. So, I think for now, we have delinked from the liquidity flow leaving the US, and hopefully, some of that liquidity will come to us in the coming weeks and months.

Today, IndusInd Bank was the talk of the town. It collapsed more than 25% at one point, and it has destroyed investor wealth like nobody’s business. We’ll take this as a case study and walk you through the history of how IndusInd Bank has performed over time. We will also see how it performed versus other banks and how your strategy could have avoided this, despite it being a part of the Nifty50 stocks.

Reading Time : 10 Minutes

Sectoral Rotation is the Absolute Truth of Markets

Markets are cyclical, and sectors move in and out of favor. A sector that has performed well for several years may slow down as valuations peak and ownership saturates. Investors gradually exit, causing underperformance, while other undervalued or under-owned sectors take the lead.

To maximize gains, one must identify and invest in the rising sectors while exiting those that have already peaked. This approach, known as “saluting the rising sun,”.. . . . .

Reading Time : 2 Minutes

Uncorrelated asset classes are a must !

This chart tracks the performance of major indices and factor indices from September 2024 to early March 2025. It includes CNX 200, Nifty Momentum 30, Nifty Alpha 50, and Gold and Silver ETFs.

The data reveals significant underperformance in higher beta strategies, with Nifty Alpha 50 being the worst hit, followed by Nifty Momentum 30, which is down around 30%.

Meanwhile, Gold (+13%) and Silver (+6%) have emerged as clear winners. . . . .

Reading Time : 2 Minutes