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Showing posts from March, 2025

ROI vs Absolute Return vs CAGR vs XIRR vs Rolling Return: Understanding the Key Differences with Examples

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  "Learn the key differences between ROI, Absolute Return, CAGR, XIRR, and Rolling Return with detailed formulas, examples, and FAQs. Discover which metric best evaluates your investment performance." When evaluating investment performance, investors often encounter various metrics such as Return on Investment (ROI), Absolute Return, CAGR, XIRR, and Rolling Return. Each of these terms offers different insights, making it crucial to understand their differences and applications. In this blog, we will break down these terms, explain their formulas, provide real-life examples, and help you decide when to use each metric effectively. 🎯 1. What is ROI (Return on Investment)? Return on Investment (ROI) is a simple metric used to calculate the percentage gain or loss from an investment relative to the initial amount invested. ✅ Formula: ROI = Final Value − Initial Investment Initial Investment × 100 \text{ROI} = \frac{\text{Final Value} - \text{Initial Investment}...

Why Patience is the Key to Stock Market Success

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" Discover why patience is the key to stock market success. Learn how long-term investing, compounding, and emotional discipline can grow your wealth over time." Stock market investing is not a quick way to get rich. It requires patience, discipline, and long-term vision. Many investors expect instant results, but the reality is different. Understanding Stock Market Returns Stock market returns are not linear. Some years may bring high returns, while others may show negative growth. Market cycles fluctuate due to economic and global factors. If you stay invested for at least 3-5 years, you increase the chances of better returns. Short-term market movements can be unpredictable, but long-term trends are usually positive. The Power of Compounding Compounding is the secret weapon in wealth creation. When you reinvest your returns, they start generating their own returns. Over time, this leads to exponential growth. The longer you stay invested, the more powerful compounding beco...

How to Create a Momentum Model Portfolio Using Google Sheets (Woksheet Included)

Investors often search for strategies that consistently outperform the market. One such strategy is the Momentum Investing Model , where stocks that have shown strong recent performance are expected to continue outperforming. This blog post walks you through creating a Momentum Model Portfolio using Google Finance in Google Sheets , with automated data retrieval, ranking, and portfolio management. 🎯 What is a Momentum Strategy? Momentum investing is a strategy where investors buy securities that have had high returns over a defined period and sell those that have performed poorly. This is based on the premise that trends persist, and strong performers tend to keep performing well. ✅ Key Factors in Momentum Strategy: Price Performance: Identify stocks that have outperformed the market in recent periods. Historical Comparison: Evaluate 15, 30, 60, and 90-day price changes. 200-Day Moving Average (200DMA): Compare current prices to their long-term trend. 52-Week Low and All-...

Price-to-Earnings (P/E) Ratio: A Guide for Smart Investors

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"Learn how to use the Price-to-Earnings (P/E) ratio for smart investing. Understand what impacts P/E, when to buy, and why you should also analyze other financial ratios." Introduction One important metric for evaluating stocks is the price-to-earnings (P/E) ratio. It enables analysts of stocks to evaluate their fair pricing. A low P/E could indicate the stock is underpriced; a high P/E is not always an indication of overvaluation. The P/E ratio will be thoroughly explained in this post together with elements influencing it, how to apply it in investing decisions, and the need to consider other financial ratios in addition to P/E. The Price-to-Earnings (P/E) Ratio: The following formula computes the P/E ratio: P / E = Market Price per Share Earnings per Share (EPS) P/E = \frac{\text{Market Price per Share}}{\text{Earnings per Share (EPS)}} ​Alternatively, it can be expressed as: P / E = Market Capitalization Net Profit P/E = \frac{\text{Market ...

Mastering TradingView: 6 Powerful Features for Smarter Trading & Investing

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  TradingView is a powerful tool for market analysis, but many traders don’t fully utilize its advanced features. In this guide, you’ll discover 6  must-use features that can improve your investment decisions, from analyzing dividend-adjusted returns to setting smart alerts . Let’s dive in! 1. How to Check Dividend-Adjusted Returns in TradingView Many stocks pay dividends , but standard charts don’t reflect these payouts. Dividend-adjusted charts show the true performance by reinvesting dividends into the stock. Steps to View Dividend-Adjusted Returns: Open TradingView and search for a stock or index. Select the  chart CAGR in indicator Adjust settings to display CAGR% return (Top, bottom, right, left, middle) To see dividend adjusted return, click on " ADJ", Right bottom corner  👉 Why it matters? Stocks with high dividend yields often outperform when dividends are included in total returns. 2. How to Calculate CAGR (Compound Annual Growth Rate) in ...

How to Identify 3X Multibagger Stocks: Case Studies and Key Learnings

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  Introduction Many investors want for a stock offering 3X returns or more. But how early on do you discover such possibilities? Technical charts, volume patterns, support levels, and solid business principles hold the key to the response. In this blog, we will study four stocks that have already delivered 3X returns : General Insurance Corporation (GICRE) Himadri Speciality Chemicals Nalwa Sons Indian Bank Examining their price movement and business success will help us to find the next multibagger! Case Study 1: General Insurance Corporation (GICRE) Stock Performance: Stock price tripled from ₹120 to ₹360 Stock trading at support level multiple times at around 120 ,technical chart pattern (reversed head and shoulder observed),exited at almost 3 x return Why It Became a Multibagger: ✔ Reversal from a strong support level ✔ Formed a Reverse Head and Shoulders pattern ✔ Increased volume on weekly chart ✔ Strong sector growth (insurance demand rising in India) Key...