Nifty Index is a terrible investment during most market cycles
Atualizado
I explored a few stats that made me re think whether it made any sense to buy nifty futures, options. Here were a few (well shocking for me) statistics
Bottom Line - Am only going to be looking at Nifty and bank nifty as hedging instruments unless proven otherwise. I do hope we have a CNX 500 Index coming soon.
Till then - buy strong stocks, growth names - and use the indices to hedge like the fund managers
- CNX 500 has outperformed Nifty on an absolute basis for long periods of time
- Bank Nifty has performed even worse than the Nifty - buying that is a losing game
- Why? I dont know - maybe diversification , low representation of new age stocks, too much commodity / cyclical exposure
- Nifty does great during bear cycles - fairly evident why - mutual fund managers like to smash it, buying puts, shorting futures to hedge their exposure
Bottom Line - Am only going to be looking at Nifty and bank nifty as hedging instruments unless proven otherwise. I do hope we have a CNX 500 Index coming soon.
Till then - buy strong stocks, growth names - and use the indices to hedge like the fund managers
Nota
Continues to perform poorly Vs CNX 500 - look at the charts and u will see what i mean. If u were to stop looking at nifty for 1 year - u wud do far better
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