So, Dow Theory which is used for Index investing in online share market courses, had finally given a sell signal last week. Most people and all students at our stock market training institute have sold their Index investments done through Dow Theory on Monday. The markets had been in turmoil for the past 3-4 months and been slipping steadily. By the way, if you have not sold your Nifty50 Index investments through ETF using Dow Theory yet, today is the best time to do so!
The most recent 2 investments made using Dow Theory had given returns of 1.35% (in 56 days), 64.25% (in 630 days), after the pandemic hit.
Why make Index investments using Dow Theory?
Index investments act as a cushion for steady growth in your portfolio and is an integral part of stock market courses online with certificate. How? Let us explain!
If you invest into 50 companies of Nifty50 individually, your portfolio will become a mess to manage, and you will always remain worried about the losses or no growth in certain stocks. By investing into Index taught in stock market courses online with certificate, you get the same composition of stocks as in the Index, without the hassle of management as it comes under a single umbrella – ETF/Index Fund. Isn’t it a perfect tool for diversification? This strategy taught in online share market courses gives you perfect opportunity to capture the growth opportunity of sector, without investing into each company of it.
Let us explain you how Index Investment using Dow Theory is taught in our stock market courses online with certificate via an example.
Assume any Index as a river. The water composition in it is the allocation of different companies constituting an Index. Now, if you take a bucket of water from it, the composition will be the same, but you can take as per your requirement. This is how ETF or Index fund functions, like the bucket. Also, not to forget that buckets come in different sizes, so does the ETFs (as per AMC). Irrespective of the fact that a person is an investor or a trader, our stock market courses online with certificate recommends having a minimum allocation of 50% into indices such as Nifty 50 or Sensex using Dow Theory. With Dow Theory one can maximise their returns earned over their Index investments, by up to 5%.
The next step as per Dow Theory
As you must sell these investments done as per Dow Theory, you must put that money into a group of the following asset options:
Fixed Deposits (Look for taxation in it)
Liquid Funds or ETFs
Gold (not as a hedge but a short-term bet using Technical Analysis)
Short term Debt Funds, but wait,
Debt funds are undergoing a major taxation change!
The taxation of debt funds currently is as follows:
Short term – Taxed as per slab rate
Long term- 20% with indexation benefits
But this is going to change from April 1,2023. All debt funds and hybrid funds with up to 35% equity will be taxed according to their tax slab rate irrespective of the holding period.
This is done to bring bank fixed deposits on par with debt mutual funds. This will be a massive blow for HNIs and UHNIs. But if you are a retail investor, today is the last day to avail the indexation benefit in it, by putting your investment as the best online share market courses recommend this to their students! This is the best asset class suggested by best stock market training institute to shift your index investment into using Dow Theory. We will start investing into index again using ETFs, when the Dow Theory gives us a buy signal.