ETF से 10% Return in Intraday Trading in Stock Market

Summary

The video discusses the impact of market fluctuations, particularly during a global sell-off, and highlights the opportunities presented by ETFs over mutual funds. It explains how ETFs can provide returns in a short period, even within a day, by taking advantage of market panic and selling pressure. The presenter compares ETFs with mutual funds and stocks, demonstrating how ETFs can offer higher returns in volatile markets. Additionally, it shares insights on Warren Buffett's investment strategy, emphasizing the importance of holding cash and using it strategically when market opportunities arise. The video encourages viewers to explore ETF investments, including SIP options.

Takeaways

• 😀 The market experienced a significant drop, with Nifty down by 5% at the opening, largely due to a global sell-off driven by the US-China trade war.
• 😀 ETFs (Exchange-Traded Funds) offer opportunities that traditional stocks or mutual funds do not, especially during market fluctuations.
• 😀 The presenter emphasizes how gold ETFs can provide high returns in a short time, showcasing a 10% return in just a few hours.
• 😀 Unlike mutual funds, which are priced at the closing NAV, ETFs provide a chance to capitalize on market dips with real-time trading.
• 😀 The Hang Seng Index showed a gap-down opening, and its ETF saw a 14% drop, creating an opportunity for significant gains by buying during the dip.
• 😀 Panic selling can be leveraged for profit by buying ETFs at lower prices during sharp market declines.
• 😀 Smart investors should use cash reserves, as recommended by Warren Buffett, to take advantage of market downturns when opportunities arise.
• 😀 ETFs replicate real indices, but their price is affected by demand and supply, often leading to deeper price drops during sell-offs.
• 😀 ETF trading is an effective way to capitalize on market volatility, offering high returns in a short period, especially during large market movements.
• 😀 Dollar cost averaging (DCA) can be used in ETFs for long-term investment strategies, allowing you to spread out investments to reduce risk over time.

Q & A

What caused the market to drop by 5% in the beginning of the day?

The market dropped by 5% primarily due to the global sell-off triggered by the trade war between the US and China, including the tariffs imposed by Trump on China.

Why are ETFs considered better than mutual funds in volatile markets?

ETFs are considered better than mutual funds because they provide opportunities to capitalize on market fluctuations more quickly. ETFs trade in real time, allowing investors to buy or sell based on price changes, while mutual funds only offer a closing NAV, making it impossible to take advantage of intra-day movements.

How can investors potentially make a year's return in a single day?

Investors can make a year's return in a single day by taking advantage of ETF price fluctuations during panic sell-offs. For example, the price of Gold Bees (ETF) dropped by 12% in a short time, presenting a buying opportunity for savvy investors.

What happened with Gold Bees when the market opened?

Gold Bees, an ETF, dropped by 12% when the market opened, despite the price of gold itself rising. This discrepancy occurred because ETFs are influenced by market demand and supply, unlike the actual commodity market.

How does panic selling impact the price of ETFs?

Panic selling can lead to significant price drops in ETFs, as investors rush to sell their holdings, causing a larger price deviation compared to the underlying index. This can create opportunities for investors to buy at lower prices.

Why is ETF trading more beneficial than trading in individual stocks during volatile market conditions?

ETFs offer diversification, as they are composed of multiple stocks. This reduces risk compared to individual stocks, and in volatile conditions, ETFs can present significant profit opportunities due to their price swings and demand-supply imbalances.

What strategy did Warren Buffett use during the market downturn?

Warren Buffett employed a strategy of holding a large cash reserve, anticipating that the market would experience a downturn. He followed the 70-30 rule, where 70% of his investments were in equity-linked assets like ETFs, and 30% was in cash equivalents like bonds.

What is the 70-30 rule that Warren Buffett follows?

The 70-30 rule advocated by Warren Buffett suggests that 70% of an investor's portfolio should be allocated to equity-linked assets such as ETFs, while the remaining 30% should be held in cash equivalents like bonds or liquid funds to take advantage of opportunities during market downturns.

What is the advantage of investing in foreign ETFs according to the speaker?

The speaker highlights that investing in foreign ETFs, alongside Indian ETFs, provides a wider range of opportunities to diversify and capture growth in global markets, especially during significant market movements.

What role do panic sell-offs play in intraday trading of ETFs?

Panic sell-offs create extreme volatility, which intraday traders can capitalize on. The sharp drops in ETF prices allow traders to buy low and sell high within short time frames, earning significant returns in a single day.