Returns are not so important, duration is !

Today’s Daily Byte

Nifty carried on after Friday’s mild pullback, closing at 24,141, up 0.5%. Watching Nifty go up has become almost tiring for those patiently sitting with their portfolios, avoiding any churning or action. Those who tried to time the market post-elections and missed the dip day after the election results have been waiting longer as the market pulls further away from the averages.

The markets continued their rally forward. Today, we will discuss PE ratios and whether we are being misled by them or making bad decisions based on them. We will delve into this topic in the second half of the video.

Reading Time : 4 Minutes

Returns are not so important, duration is !

Over the past 95 years, the S&P 500 has provided valuable data on market returns. This data is not only relevant to the US market but can also be applied to other markets, including India. The key takeaway from this data is the importance of staying invested in the market for the long term to maximize returns and minimize losses.

For those who held their position in the S&P 500 for one year, the maximum gain was 52%, while the maximum loss was 43.8%. When extending the holding period to three years, the maximum gain was 30% per year, and the maximum loss was 27% per year. These figures show that while short-term investments can yield high returns, they also carry a significant risk of loss.. . . . .

Reading Time : 4 Minutes

Strong stocks are a must in the Portfolio

Let’s look at the market caps of Nvidia, Microsoft, Apple, and the Russell 2000. All four are currently around $3 trillion.

Over the past ten years, Microsoft and Apple have steadily grown from about half a trillion to $3 trillion, a six-fold increase. Meanwhile, the Russell 2000, representing small caps, has risen from $2 trillion to $3 trillion, with fluctuations between $1.5 trillion and $3.6 trillion.. . . . .

Reading Time : 3 Minutes