Working On a Theory

Ever since I have started creating Videoes on YouTube, I always try to bring some perspective which can be different. Or it can be on the same topic but presented differently. This can help someone who is trying to learn something. For example, the ETF Shop is an instant hit for many people because it is less risky as well as we can get monthly income from it. Also the profit booking is done which is again great because just keeping it for long term doesn't make sense if you are not enjoying the profit.

PC: Pixabay.com

So in similar ways, I am actually working on a theory where, what if instead of buying Nifty 50 ETF every month, what we can do is to buy the ETF whenever it falls by more than 1%, 2%, 3% or anything. And when the bought ETF reaches 6% profit we will sell it off. I told it as theory because till now I have not back tested it, so I am not sure how well it work. But I think this will surely give us much more profit than the normal buy and forget.

Because when you buy and forget, that will move in a cycle it will go up and will go down. But when you regularly book profit, you are actually taking advantage of the ups and downs of the market. For example, today the market has gone down by more than 10% from it's all time high. And it's a matter of time when it reaches that again. Now of you invest today, you will easily get more than 10% from here.

Or if it goes down from here you can buy again and thus keep on invested till it reverse. I know catching a falling knife doesn't make sense, but in case of ETF you can catch the falling knife till the end or in simple terms when you don't exhaust your money.

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