How to Time the Nifty-50 Based on the Fed’s Balance Sheet Size?
HOW TO GENERATE AT LEAST 12% PA FROM A 5-YEAR SIP WITH 95%+ PROBABILITY? PART 3 – HOW TO TIME THE NIFTY-50 BASED ON RATE OF CHANGE OF US FEDERAL RESERVE’S BALANCE SHEET SIZE?
In the first two parts of this series we saw how the return of a 5-Year SIP in the NIFTY has been almost entirely dependent on how the market conditions are at the time of the SIP coming to an end. We saw how the return of a 5-Year SIP in the NIFTY that comes to an end in the middle of strong rally (e.g. 5-Year SIP from Nov-02 to Nov-07, which ended close to the market top witnessed before the crash of 2008) can be as high as 45% per annum, and the return of a 5-Year SIP ending in the middle of a steep market crash (e.g. 5-Year SIP from Apr-15 to Apr-20, which ended in the middle of a 40% crash in NIFTY that was witnessed at the onset of the COVID pandemic) can be as bad as -5.82% per annum!
In Part 2 of this series, we saw how, in order to address such a large variance in outcome of a 5-Year SIP, we can potentially time the markets based on the prevailing PE Ratio of the NIFTY such that we can get out of markets near market peaks and get back in close to the bottom, and in the process, push up the worst case (historical) outcome of a 5-Year SIP in the NIFTY from -5.82% per annum to +5.4% per annum!
But can the worst case outcome of the 5-Year SIP be improved further still? In Part 3 of this series, we discuss exactly that. In this Part, we discuss how our market timing logic can be enhanced further still by way of timing the markets based on not one, but two market timing variables – the prevailing PE Ratio of the NIFTY and rate of change of the size of the US FED’s Balance Sheet Size, and in the process, not just push up the worst case (historical) outcome of a 5-Year SIP in the NIFTY from -5.82% per annum to +6.37% per annum, but also improve the (historical) probability of achieving a return of 12% per annum or more at the end of a 5-Year SIP Investment in the NIFTY from 53% to as much as 83%! So please do watch this video to know how to bring about such a phenomenal improvement in the outcome of a 5-Year SIP!
Do watch the below YouTube video on” 40%+ pa in Bull Market, FD+ Return even in a Crash | Part3- Market Timing Based on Fed Balance Sheet”
Watch Part 1: How To Turn Your SIP Into a FD Yielding 12%+ pa? PART 1 - Limitations/Flaws in Conventional SIPs
Watch Part 2: Turning Your SIP Into a 12% PA FD Even During a NIFTY-50 Crash | Part2-Market Timing Using PE Ratio
