hello, friends today I am going to tell you a way to grow your money by forgetting Wali's strategy you can also call it Do nothing strategy to make money from the stock market.
in this strategy, a person who does not understand the share market and does not want to understand the share market but wants to grow their money with the stock market.
so here is the thing you only need to understand PE Ratio means the price to earnings ratio, understanding the math of that you have to invest money into index fund ETF or index fund.
if you want to know index ETF click here
if you want to know index fund click here
in 2008 nifty 50 pe ratio was 25 before the 2008 crash market crash nifty pe ratio was 28.29 so if you manage to know when to invest by pe ratio, you can easily decide entry invest and when to withdraw.
PE 25-30 MEANS EXTREME EXPENSIVE: SELL TO BOOK PROFIT
PE 20-25 MEANS EXPENSIVE: YOU CAN BOOK 80% OF YOUR CAPITAL AND SWITCH TO OTHER ASSETS OR CAN START SIP WITH A SMALL AMOUNT.
PE 15-20 MEANS AVERAGE: YoU CAN START SIP BY INCREASE AMOUNT
PE 12-15 MEANS INEXPENSIVE: CAN START SIP OR ONE TIME BIG INVESTMENT FOR LONG RUN
PE BELOW 12 MEANS CHEAP You CAN INVEST BIG AMOUNT FOR LONG RUN
in the index fund or ETF is the best investment if you do not want to follow the market but to participate in the growth of the economy.
just invest the money and forget about it,.
you have to do the only thing that is to calculated pe every year independent day and evaluate if the investment is giving you a good return if pe is expensive you can book you profit.
In the past, every time you invest your money into an index fund or index ETF, watching the PE ratio and calculating the value by the above rule make you richer over time.
if you invested in 2008 when the PE ratio is less than 18 you are getting at least two times of your money when you do not want to spend your time on the market then give your money and time to the market and just stay there for a longer time.
If you invested your money in 2020 march when the pe ratio is below 20 then also you double your money till July 2021, but I think at that time investing is not everybody's cup of tea but according to the PE ratio rule you will be profitable for the long run.
Every time you find the PE is expensive than just do one thing book your profit. you can also follow a good rule which is you can book profit 50% of your capital and watch the market if it is growing more than book more 25% than do the process till full capital. when the PE is not expensive you can re-enter the market.
REMEMBER one rule everybody here want to make money only 10% are profitable because they just follow the rule which is followed by history. They know the rule and they are profitable, if you are a learner mindset and your thought is unique the market will reward over time.
Two of my friend invested money in 2008
ONE IS Rahul Maity who has invested by greed in index funds while the market was at an all-time high. after the crash he just lost his mind than he went to a financial adviser, he was very much sad he told me all those things about how he invested but the good thing about Rahul as he recognizes that he buy that index ETF in greed and he tells me fear of missing out make him buy that ETF. when asked those things to a financial advisor, advisor quietly listen to its every word and just tell him one-word patience my friend till that day he keeps holding to it but when on July when index fund touches all-time high he just asking his FA(financial advisor) what to do every single day for one month but the advisor reply was just booked your profit because the PE rule is saying it is expensive now so you can take out your all money or book by a systematic method which is told above. Rahul told me the word "patience" gives me 2 times money which is not bad with approx 15% growth every year. He thanks his financial advisor because only for that FA he is now financially free, he told me if he quit his job today then also he did not worry about money because he has grown his money plant well enough that the money plant can pay that salary.
while my second friend GATI makes at least 300% by following this PE ratio strategy he buys the index fund when PE is below 20 and books profit when it is expensive(PE 25 or more) which drives his money with 25% growth of his capital. But Gati is constantly reading about financial literacy and different ways to earn money. Gati has multiple sources of income which give him regular income every month, he told me I create a system that will generate money for me and an index fund is one of my investments.
Every time you invest money always ask your financial advisor before investing.
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