Should we hold cash, or until when?

[escencia]

@roadtrippin69 I saw a so heres an hope your day is good

 

[pelihat]

@roadtrippin69 This is interesting. PM me if you need help with Data Viz.

 

[roadtrippin69]

@pelihat Sure. I'm thinking of going a blog write up! Will definitely reach out to you!

 

[mb_c]

@roadtrippin69 Following

 

[lewisofthenorth]

@roadtrippin69 Interesting, nothing beats time in the market in the longer run.

However,

You invest only when the index is at least x% from the all-time high.

This isn't a good buy signal. I would probably experiment with other signals as well.

Also, it would be interesting to see how this plays out with Stocks.

 

[roadtrippin69]

@lewisofthenorth If there's a strategy you want me to try, let me know. I'll run them when I find time next.

 

[hosnloem]

@roadtrippin69 I replicated the same with S&P 500 data:

But, it keeps saying that "BuyAsSoonAsYouHaveCash" is never the best option.

This is from 2015 - 2020: (with percentage_from_all_time_high set to 10 %)

Running strategy: BuyAsSoonAsYouHaveCash

Cash to begin with: 0

Monthly cash increment: 1000

Final holding value: 18437.33691848

Max cash held at one point: 1022.6449706000001

Max cash held buy date: 2019-12-31 00:00:00

Running strategy: BuyOnFallFromAllTimeHigh

Fall Percentage: 10%

Cash to begin with: 0

Monthly cash increment: 1000

Final holding value: 18520.96562358

Max cash held at one point: 2000

Max cash held buy date: 2019-10-09 00:00:00

This is from 1999-2020: (with percentage_from_all_time_high set to 100 %)

Running strategy: BuyAsSoonAsYouHaveCash

Cash to begin with: 0

Monthly cash increment: 1000

Final holding value: 18437.33691848

Max cash held at one point: 1022.6449706000001

Max cash held buy date: 2019-12-31 00:00:00

Running strategy: BuyOnFallFromAllTimeHigh

Fall Percentage: 100%

Cash to begin with: 0

Monthly cash increment: 1000

Final holding value: 22000.0 (# Can you explain this value?)

Max cash held at one point: 0

Max cash held buy date: None

Lowest S&P 500 value: 676.530029

On: 2009-03-09

Highest S&P 500 value: 3257.850098

On: 2020-01-02

(Data is right because it displays the right lowest and highest values as evidenced by the last few lines of output I added.) But, when you set the percentage_from_all_time_high to 100%, it may not be showing the correct final value.

 

[roadtrippin69]

@hosnloem I'll try and see the S&P data and results when i find time next. Thanks for pointing this out.

 

[hosnloem]

@roadtrippin69 Here is the input file. Please let me know if you made changes to the code. Would also be interested in working on some other code you may want to write or test.

S&P 500 input historical data files: https://finance.yahoo.com/quote/^GSPC/history?p=^GSPC

Change the datetime format in your code to match the date format in this file. Remove the last 2 columns.

 

[muin496]

@roadtrippin69 How did we get the data for the nifty50 for the past 20years?

 

[roadtrippin69]

@muin496 https://www.niftyindices.com/reports/historical-data

 

[rosebuds1111]

@muin496 You can download from nifty website.

 

[hosnloem]

@roadtrippin69 Where are the dependent files, the "StockCandle" and NIFTY 50_OLHC_DAILY_01011999_01012020.csv?

Can you upload that as well?

 

[roadtrippin69]

@hosnloem They are uploaded as well in separate directories. You can find them under the root directory.

 

[hosnloem]

@roadtrippin69 Ok got it, I only looked under the /experiments dir.
The one thing I did find was that your logic looks like this - "If the % fall is greater than my threshold %, then buy immediately. This buys at the current close price."
But the % fall was already calculated using the day's close price (this means the market has closed), so you won't be able to buy after the market closes.
So, shouldn't you buy it at the next day's close price?

 

[michelle271]

@roadtrippin69 You need to add buy and sell/switch strategies aka asset allocation. Otherwise time in market will always win with a buy only strategy since the overall direction of market is up in the long term.

 

[shel75]

@roadtrippin69 Hey!

I am unable to understand the table and results that you got from the analysis.

Mind explaining it?

For example, what does buy ASAP mean and the maximum cash deployment?

 

[roadtrippin69]

@shel75 So, in the current experiment, the assumption is you get Rs. 1000 at the beginning of each month. Buy ASAP means you deploy that cash as soon as you can, i.e the first day of the month when the market is open.

Maximum cash deployment means the maximum cash you ever deployed on a single day. In the other strategies, where you are waiting for the index to fall a certain percentage, you hold onto cash that you receive every month. So, this tells you how long you waited to deploy cash until your criteria was met.

 

[shel75]

@roadtrippin69 Thanks!

But why is there such a difference between max cash deployed in ASAP and others?

Do he other columns mean that you held on the cash for the entire year?