With over a month gone by in 2019, we look in to the performance of Nifty and Bank Nifty against some of the World's major indices namely
- Dow Jones
- Germany Dax
- China &
...over different time horizons
In the above chart we see Year to date performance of our market which is in the negative (NiftY -0.15% & Bank Nifty -1.12%)
Our markets have under-performed compared to other world markets by roughly 4 - 9.2%
So with the Interim Budget done with Will our markets play catch up... What do you think..???
Now Looking at 1 year time frame chart what have we got...
Well here we see things have turned upside down... Our markets although in the negative territory but fared far better (Nifty -3.83% & Bank Nifty -2.72% than other world indices... (Dow Jones -6.84% to Shanghai -27.04%). Our market managed to hold on to the onslaught and turmoil that other markets went through especially in late December 2018.
Q 2. So does the out-performance of world indices in year to date chart reflect that maybe it is not our chance but it is the world market who is playing the catch up game...
Well think again... tinker your mind...play around a little bit... ;-)
On a 5 year time horizon...
Well well well this is where we mark our difference. Bank Nifty leads the pack of indices UP by a whooping 160%. & Nifty holds on to the 2nd spot at 75%. Dow comes in at 3rd spot with 55% gain with Dax being the worst performer of the pack at 20%
Q3. So is there really any co-relation between our market and world market.
Well Every chart has it's own story but we cannot ignore the world markets totally. There are times when our indices move in tandem with World market ( we can differ in terms of magnitude of movement) & then there are times when our market moves on our own. As a trader knowing the difference can help us to plan our trade.
Now finally the last chart... how they fared since 2001
Whoa whoa whoa there is no stopping Bank Nifty ... UP a staggering 2994%
Nifty too up 809%
All while the rest of markets (so called developed economies) managed to give returns just between 32-123% in 18 years. Well now you know why the headline is titled "18 TILL I DIE" :-)
What a performance. But the question is will we continue to outperform....
Will the yearly 10-15% Compounded interest return calculation that many Financial Sales people harp on, hold true even in future...
To put it in simple terms It all depends on the state of economy. Most of the indices are of economies which are considered a Developed economy or close to being a Developed one. The word Developed itself says it all... means the best part of growth is behind us now. And the country is more in a state of managing what they have in their hand.
Our economy is still in the state of developing that means we still have a good scope to grow. The out-performance of our market (more up in a bull market and more down in bear market but with faster recovery) will continue so long as we are in the middle of Developing economy stage. As we get closer to being a Developed country (closer because remember markets tend to move ahead) the out-performance will start to taper No matter the size of the economy no matter how different our economy is.
If we analyse Be it economy of smaller size countries like Japan, Germany, or be it bigger size countries like China and US - they are all different from each other & All have different set of problems yet are having similar kind of effect on the Stock Market performance.
"Do not take life too seriously. You will never get out of it alive." - Elbert Hubbard
Coming back from the economy to the comparison charts... How many of you changed your views or had a different perspective with each chart.
It's perfectly fine if you did. That's the beauty of viewing charts over different time horizons. It gives us different perspective... different views... different outcome from those views with regards to arriving at different targets and Stop losses and different strategies that can be deployed. A whole lot of things open up...
Remember in Financial Market at any given point of time Opportunities are aplenty. What is scarce is window of opportunity and our resources. And our objective is to make the best that we can...