{"id":5390,"date":"2021-10-28T17:47:12","date_gmt":"2021-10-28T12:17:12","guid":{"rendered":"https:\/\/www.tickertape.in\/blog\/?p=5390"},"modified":"2021-10-28T17:47:12","modified_gmt":"2021-10-28T12:17:12","slug":"muhurat-trading-then-and-now","status":"publish","type":"post","link":"https:\/\/www.tickertape.in\/blog\/muhurat-trading-then-and-now\/","title":{"rendered":"Muhurat Trading \u2013 Then and Now"},"content":{"rendered":"\n<p>After 2017, this would be one good Diwali for investors where one would be able to look at a good investment return.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.tickertape.in\/blog\/muhurat-trading-2021\/?utm_source=blog&amp;utm_medium=guestarticle&amp;utm_campaign=nooreshmerani_mtrad\">Muhurat Trading<\/a> is now more than a 100-yr-old tradition that has been followed with a lot of fervour and enthusiasm in the Indian investor community.<\/p>\n\n\n\n<p>Let us look at some of the traditions around Diwali Muhurat Trading and how we can look at it in an individual context in the current environment.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_66_1 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title \" >Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tickertape.in\/blog\/muhurat-trading-then-and-now\/#Muhurat-day-buying-for-long-term\" title=\"Muhurat day buying for long term\">Muhurat day buying for long term<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tickertape.in\/blog\/muhurat-trading-then-and-now\/#What-to-do-in-the-current-world\" title=\"What to do in the current world?\">What to do in the current world?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tickertape.in\/blog\/muhurat-trading-then-and-now\/#Chopda-Poojan\" title=\"Chopda Poojan\">Chopda Poojan<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tickertape.in\/blog\/muhurat-trading-then-and-now\/#Asset-Allocation-Timing-and-New-Rules\" title=\"Asset Allocation, Timing, and New Rules\">Asset Allocation, Timing, and New Rules<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tickertape.in\/blog\/muhurat-trading-then-and-now\/#Lets-take-an-example-of-how-being-Totally-Wrong-can-hurt-the-CAGR\" title=\"Let\u2019s take an example of how being Totally Wrong can hurt the CAGR\">Let\u2019s take an example of how being Totally Wrong can hurt the CAGR<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tickertape.in\/blog\/muhurat-trading-then-and-now\/#The-Diwali-to-Diwali-Return-Year-by-Year\" title=\"The Diwali-to-Diwali Return Year by Year&nbsp;\">The Diwali-to-Diwali Return Year by Year&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Muhurat-day-buying-for-long-term\"><\/span><strong>Muhurat day buying for long term<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A lot of old-time investors tend to buy some quantities of their favourite companies or anything they would for the long-term horizons of at least till next Diwali.<\/p>\n\n\n\n<p>Over the years holding periods of investors\/traders have only gone down. As the time frame gets shorter the skillset\/temperament required keeps getting higher. In the long term in a growing economy, you can just end up being plain lucky by owning a few <a href=\"https:\/\/blog.tickertape.in\/what-are-multibagger-stocks\/?utm_source=blog&amp;utm_medium=guestarticle&amp;utm_campaign=nooreshmerani_mtrad\" rel=\"nofollow noopener\" target=\"_blank\">multi-baggers<\/a>. But how can you get lucky every month, every week, every hour?<\/p>\n\n\n<span class='bctt-click-to-tweet'><span class='bctt-ctt-text'><a href=\"https:\/\/twitter.com\/intent\/tweet?url=https%3A%2F%2Fwww.tickertape.in%2Fblog%2Fmuhurat-trading-then-and-now%2F&#038;text=Over%20the%20years%20holding%20periods%20of%20investors%2Ftraders%20have%20only%20gone%20down.%20As%20the%20time%20frame%20gets%20shorter%2C%20the%20skillset%2Ftemperament%20required%20keeps%20getting%20higher.&#038;via=TickertapeIN&#038;related=TickertapeIN\" target=\"_blank\" rel=\"noopener noreferrer\">Over the years holding periods of investors\/traders have only gone down. As the time frame gets shorter, the skillset\/temperament required keeps getting higher. <\/a><\/span><a href=\"https:\/\/twitter.com\/intent\/tweet?url=https%3A%2F%2Fwww.tickertape.in%2Fblog%2Fmuhurat-trading-then-and-now%2F&#038;text=Over%20the%20years%20holding%20periods%20of%20investors%2Ftraders%20have%20only%20gone%20down.%20As%20the%20time%20frame%20gets%20shorter%2C%20the%20skillset%2Ftemperament%20required%20keeps%20getting%20higher.&#038;via=TickertapeIN&#038;related=TickertapeIN\" target=\"_blank\" class=\"bctt-ctt-btn\" rel=\"noopener noreferrer\">Click To Tweet<\/a><\/span>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What-to-do-in-the-current-world\"><\/span><strong>What to do in the current world?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>Start thinking in terms of multiple Diwalis instead of monthly expiries and shorter-term holding periods.&nbsp;<\/li><li>Start thinking about how you would add new Lakshmi (cash) to the portfolio instead of focusing on an incremental 1-2% <a href=\"https:\/\/www.tickertape.in\/blog\/compound-annual-growth-rate\/?utm_source=blog&amp;utm_medium=guestarticle&amp;utm_campaign=nooreshmerani_mtrad\">CAGR<\/a>.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Chopda-Poojan\"><\/span><strong>Chopda Poojan<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The trading community performs pooja on account books, safes, and Tijoris on Dhanteras as well as on Diwali.&nbsp;<\/p>\n\n\n\n<p>In today\u2019s world, the Computer\/Laptop and other devices have taken the place of books. Now is the time you do a cleanup\/upgrade of your devices. Earlier the trading used to happen on a trading floor and there was no chair. Even today the chairs most traders\/investors are the cheapest\/oldest compared to every other device. A good ergonomic chair that suits your body can do wonders for your working hours and relieve you a lot of pain.&nbsp;<\/p>\n\n\n\n<ul><li>Go ahead, clean up your computers\/laptops not just from the outside but even clean out the memory.&nbsp;<\/li><li>Go ahead and revamp your investing\/trading desk. Go for an ergonomic chair and mouse, which helps you in small ways today but will do wonders in the long run.&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Asset-Allocation-Timing-and-New-Rules\"><\/span><strong>Asset Allocation, Timing, and New Rules<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The simplest strategy on paper is Buy and Hold and looks great in hindsight after a <a href=\"https:\/\/www.tickertape.in\/blog\/bull-market\/\">bull market<\/a> but at the bottom of the <a href=\"https:\/\/www.tickertape.in\/blog\/don-fear-a-bear-market\/\">Bear Market<\/a> looks the worst.<\/p>\n\n\n\n<p>I would blame the below statement taken literally.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Time in the Market is More Important than Timing the Market.&nbsp;<\/p><\/blockquote>\n\n\n\n<p>Theoretically Timing the Market Tops and Bottoms would imply one would Sell 100% of <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-equity\/\">Equity<\/a> exposure and then Buy 100% of Exposure. This is extremely difficult to be right on and if you do not have exposure to equity in 2020 or 2008 you have missed the bus forever.&nbsp;<\/p>\n\n\n\n<p>This is what scares investors but the fact is I haven\u2019t met anyone who even tries to go from 100% <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-shareholders-equity-overview-components-and-how-to-calculate\/?utm_source=blog&amp;utm_medium=guestarticle&amp;utm_campaign=nooreshmerani_mtrad\">Equity<\/a> to 100% Cash. I am yet to meet many traders who have Zero Positions for the long term so how do you expect an investor to go from 0% equity to 100% Equity.&nbsp;<\/p>\n\n\n\n<p>As an investor one needs to focus on when to increase Cash by 5-10-20-30% or when to increase Equity or Scale-up Equity Exposure by 5-10-20-30%. Or simply put thumb rules for <a href=\"https:\/\/www.tickertape.in\/blog\/what-is-asset-allocation\/?utm_source=blog&amp;utm_medium=guestarticle&amp;utm_campaign=nooreshmerani_mtrad\">asset allocation<\/a>.&nbsp;<\/p>\n\n\n\n<p>There is a lot of work and that\u2019s why the industry loves to write \u2013 Do Not Time the Market!!&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Lets-take-an-example-of-how-being-Totally-Wrong-can-hurt-the-CAGR\"><\/span><strong>Let\u2019s take an example of how being Totally Wrong can hurt the CAGR<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Going back to Diwali 20 yrs, the <a href=\"https:\/\/www.tickertape.in\/indices\/nifty-index-.NSEI?utm_source=blog&amp;utm_medium=article&amp;utm_campaign=mtrad\" target=\"_blank\" rel=\"noreferrer noopener\">Nifty<\/a> was around 1000 odd levels.<\/p>\n\n\n\n<p>So in 20 yrs, the <a href=\"https:\/\/www.tickertape.in\/blog\/stock-market-index\/\">Index<\/a> has gone 18x which just looks amazing. Add dividends and you are easily above 20x in 20 yrs. Now that\u2019s a cool 15-16% <a href=\"https:\/\/www.tickertape.in\/blog\/compound-annual-growth-rate\/\">CAGR<\/a>.&nbsp;<\/p>\n\n\n\n<p>If we go a year back to the top of the IT Y2K boom of 1999-2000, which was around 1700-1800. The CAGR drops to 12%, which does not look great given the FD rates were 8-9% then.&nbsp;<\/p>\n\n\n\n<p>Same way if one bought in November 2007 at 5600 the CAGR drops to sub 9% even after 14 yrs.<\/p>\n\n\n\n<p>So what one really needs is an <a href=\"https:\/\/www.tickertape.in\/blog\/why-is-asset-allocation-one-of-the-most-important-aspects-of-portfolio-construction\/\">Asset Allocation<\/a> Strategy that increases Equity in Bad Times and Cash in Good Times.&nbsp;<\/p>\n\n\n\n<p>So cleanse your investment Philosophy of Buy and Hold with a tinge of Asset Allocation, Timing, and New Thumb Rules.&nbsp;<\/p>\n\n\n\n<p>Why do you need to keep reworking your investment\/trading strategies is to make your Equity more Linear compared to the Index Equity Curve?<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><strong>It\u2019s Never Linear but Extremely Lumpy<\/strong><\/p><\/blockquote>\n\n\n<span class='bctt-click-to-tweet'><span class='bctt-ctt-text'><a href=\"https:\/\/twitter.com\/intent\/tweet?url=https%3A%2F%2Fwww.tickertape.in%2Fblog%2Fmuhurat-trading-then-and-now%2F&#038;text=Cleanse%20your%20investment%20Philosophy%20of%20Buy%20and%20Hold%20with%20a%20tinge%20of%20Asset%20Allocation%2C%20Timing%2C%20and%20New%20Thumb%20Rules.&#038;via=TickertapeIN&#038;related=TickertapeIN\" target=\"_blank\" rel=\"noopener noreferrer\">Cleanse your investment Philosophy of Buy and Hold with a tinge of Asset Allocation, Timing, and New Thumb Rules. <\/a><\/span><a href=\"https:\/\/twitter.com\/intent\/tweet?url=https%3A%2F%2Fwww.tickertape.in%2Fblog%2Fmuhurat-trading-then-and-now%2F&#038;text=Cleanse%20your%20investment%20Philosophy%20of%20Buy%20and%20Hold%20with%20a%20tinge%20of%20Asset%20Allocation%2C%20Timing%2C%20and%20New%20Thumb%20Rules.&#038;via=TickertapeIN&#038;related=TickertapeIN\" target=\"_blank\" class=\"bctt-ctt-btn\" rel=\"noopener noreferrer\">Click To Tweet<\/a><\/span>\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"The-Diwali-to-Diwali-Return-Year-by-Year\"><\/span><strong>The Diwali-to-Diwali Return Year by Year&nbsp;<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Year<\/strong><\/td><td><strong>Date<\/strong><\/td><td><strong>Nifty Close<\/strong><\/td><td><strong>Return %<\/strong><\/td><\/tr><tr><td>2001<\/td><td>14-Nov<\/td><td>1015<\/td><td>&nbsp;<\/td><\/tr><tr><td>2002<\/td><td>04-Nov<\/td><td>962<\/td><td>-5%<\/td><\/tr><tr><td>2003<\/td><td>25-Oct<\/td><td>1521<\/td><td>58%<\/td><\/tr><tr><td>2004<\/td><td>12-Nov<\/td><td>1872<\/td><td>23%<\/td><\/tr><tr><td>2005<\/td><td>01-Nov<\/td><td>2389<\/td><td>28%<\/td><\/tr><tr><td>2006<\/td><td>21-Oct<\/td><td>3683<\/td><td>54%<\/td><\/tr><tr><td>2007<\/td><td>09-Nov<\/td><td>5663<\/td><td>54%<\/td><\/tr><tr><td>2008<\/td><td>28-Oct<\/td><td>2526<\/td><td>-55%<\/td><\/tr><tr><td>2009<\/td><td>17-Oct<\/td><td>5062<\/td><td>100%<\/td><\/tr><tr><td>2010<\/td><td>05-Nov<\/td><td>6312<\/td><td>25%<\/td><\/tr><tr><td>2011<\/td><td>26-Oct<\/td><td>5201<\/td><td>-18%<\/td><\/tr><tr><td>2012<\/td><td>13-Nov<\/td><td>5666<\/td><td>9%<\/td><\/tr><tr><td>2013<\/td><td>03-Nov<\/td><td>6317<\/td><td>11%<\/td><\/tr><tr><td>2014<\/td><td>23-Oct<\/td><td>8014<\/td><td>27%<\/td><\/tr><tr><td>2015<\/td><td>11-Nov<\/td><td>7825<\/td><td>-2%<\/td><\/tr><tr><td>2016<\/td><td>30-Oct<\/td><td>8625<\/td><td>10%<\/td><\/tr><tr><td>2017<\/td><td>19-Oct<\/td><td>10146<\/td><td>18%<\/td><\/tr><tr><td>2018<\/td><td>07-Nov<\/td><td>10598<\/td><td>4%<\/td><\/tr><tr><td>2019<\/td><td>27-Oct<\/td><td>11627<\/td><td>10%<\/td><\/tr><tr><td>2020<\/td><td>14-Nov<\/td><td>12780<\/td><td>10%<\/td><\/tr><tr><td>2021<\/td><td>CMP<\/td><td>18100<\/td><td>42%<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p>The Total CAGR is 15.5% but there is not a single year where the returns are 15%. It clearly shows how lumpy returns can be.&nbsp;<\/p>\n\n\n\n<p><strong>Conclusion<\/strong><\/p>\n\n\n\n<ul><li>One of the major learnings from History is after a Bad Event the chances of an event of a similar scale only reduce.&nbsp;<\/li><li>After a Pandemic, Global Crisis, Bank Failures, and various events in the next few years can continue to surprise you pleasantly.&nbsp;<\/li><li>Let\u2019s hope history rhymes going forward.&nbsp;<\/li><li>Diwali is a festival of lights and hopefully, we are getting into multi-years of Brightness in Indian Equities.<\/li><\/ul>\n\n\n\n<p>You can check out <a href=\"https:\/\/nooreshtech.smallcase.com\/?utm_source=blog&amp;utm_medium=guestarticle&amp;utm_campaign=nooreshmerani_mtrad\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Nooresh Merani smallcases<\/a> here.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Let us look at some of the traditions around Muhurat Trading and how we can look at it in an individual context in the current environment.<\/p>\n","protected":false},"author":57,"featured_media":5412,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[9,1759],"tags":[901],"acf":[],"modified_by":"Aradhana Gotur","jetpack_featured_media_url":"https:\/\/www.tickertape.in\/blog\/wp-content\/uploads\/2021\/10\/NM.jpg?wsr","_links":{"self":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5390"}],"collection":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/users\/57"}],"replies":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/comments?post=5390"}],"version-history":[{"count":4,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5390\/revisions"}],"predecessor-version":[{"id":5415,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/posts\/5390\/revisions\/5415"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media\/5412"}],"wp:attachment":[{"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/media?parent=5390"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/categories?post=5390"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tickertape.in\/blog\/wp-json\/wp\/v2\/tags?post=5390"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}