I've been musing a bit recently on systematic investing on the NSE NIFTY. The idea is to "blindly" invest a sum that you are comfortable with at regular intervals without any views on timing the market.

Let us look at how things would turn out if this was the case.

The experiment is as follows:

  • Invest INR 30,000 on the first day of every month
  • Start the investment in 2004 and then carry on till date
  • Invest in the CNX NIFTY Index

Let us first look at how the NIFTY performed since 2004.

CNX NIFTY performance since 2004

The results are as follows:

  • Number of Trades: 120 BUYs and 1 SELL (end of the period)
  • Total units traded: 936
  • Total value invested (lakhs): 33.1937
  • Total value returned (lakhs): -56.68556
  • Total net cashflow (lakhs): -23.49187

(-ve cashflow implies ... cashflow back to the investor)

The portfolio performance over the trade period is shown below:

Portfolio Performance over the trading period

The cashflow chart is shown below:

Cashflow Chart over the trading period

That's a return of about 10.3% annualized over approximately 10 years!

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