Rupee Cost Averaging and Portfolio Value Averaging fits well at times like the present. This was proved in the 2 Demo accounts I tracked from the 4th of January 2016 to the 3rd of February 2016. These 2 Accounts had 5 stocks namely Grain Elevators, Vallibel Power, LB finance, Alumex and RCL. The Strategy was to invest Rs.10,000.00 into the 5 stocks each day at the closing prices. The 1st account followed the Rupee Cost Averaging method of daily investing Rs. 2000.00 each out of the Rs. 10,000.00 to the 5 stocks.
The 2nd account followed the Portfolio Value Averaging method of making sure that Portfolio had a value of Rs. 2000.00 for each stock daily, totaling Rs.10,000.00 for the 5 stocks, when bought at the closing price.
The accounts were topped up every day for 22 market days, and was sold out on the 5th of February 2016, at the closing price of the day. At the time of the Sale the 5 stocks had made the following returns separately within the 2 methods:
Annualized Return on RCA method:
Grain Elevators - 44.52%
Vallibel Power - 5.8%
LB Finance - 68.19%
Alumex - 46.83%
Royal Ceramics - (3.07%)
Annualized Return on PVA method:
Grain Elevators - 59.17%
Vallibel Power - 8.71%
LB Finance - 75.75%
Alumex - 52.71%
Royal Ceramics - (1.10%)
The status of the entire portfolio is given below.
Investing to a plan certainly pays dividend.
If you want my assistance to make a tailor made averaging method, please call/mail me.
Making money in the Stock Market is not easy, but not hard only with increased education and understanding.......
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