Investment Strategy: SIP vs SMA 50

Update: Big one. Scroll to the bottom to see it.

I tend to believe investment is a long term activity. It is something I will be engaged in till my end. So the money is going to be invested for about 40 – 50 years. With that long an outlook, a low cost Index fund in Equity is as good as anything. I set out to see if there is a better strategy to be executed than doing a monthly cost averaging or Systematic Investment Plan (SIP).


The idea behind a SIP is simple, every month on a given date you buy the same thing for a given amount. But one thing bugs me, the most optimal time to buy in that month is not always the date the SIP purchase happens. So I set out to see if I can use the Simple Moving Average (SMA 50) technical indicator to find the BUY signals for investing.

SMA based Strategy

The strategy is

Whenever the PRICE closes below the 50 DAY SMA, we buy. If it doesn’t cross for X number of months, then the money just accumulates and sits idle.

The strategy tries to optimize the buying price to stay below the average price – a pseudo fair price.

So here is what I did, I used Streak to create a strategy and generated all the signals for the SBI Nifty 50 ETF


I set the stoploss at 15% and a profit booking at 5%. The higher stoploss and lower profit limit are to maximize the number of BUY signals. As the idea is NOT to trade, but to invest. I am only interested in the BUY signals, ideally I won’t sell it for 20-30 years.

A good trading strategy?

Interestingly, it seems like a pretty good positional trading strategy with Zero loss trades and generating 16+% CAGR. Impressive. Maybe some trader can tell me it this is worth it after all the taxes and brokerage 🙂

Total Units

Anyway, getting back to my analysis – I downloaded the strategy with dates and prices at which the trades happened. From them, I calculated the number of units I could have bought, if I put aside 1000 rupees every month and bought only on the BUY signals from January 01, 2016 to October 31, 2019 (46 months)


It comes to around 410 Units


Now I wanted to know how many units could I have bought if I did a regular SIP for the same period with the same amount of money for the same time period. Using Moneycontrol SIP calculator, I got


I would have bought 468 Units. Yup, an extra 58 units over the SMA 50 Strategy.


The probable cause for the underperformance of the SMA 50 strategy is that, the money sits ideally for 7 or 8 months at certain times when the index is trending up and and SMA hasn’t caught up to it. This loss of time results in the poor performance of this strategy. Time is literally money. So time lost is money lost.


After some tweets from @IndiaEtfs, I came with an SMA 50 augmented SIP strategy, which tries to catch the SMA crossing down every month, if it doesn’t occur, just invest it on 1st of the following month. This way, we are not letting the money sit idle and are using the opportunity of paying lower prices when it happens.

The result wasn’t that surprising. The returns were almost the same as that of the SIP.


The difference is merely 1 unit which I assume is nothing when you round off when buying whole units on the market. So unless someone devises a method to find out the market bottom, we investors are better off just doing SIPs consistently.

Pop-Out a box effect in DaVinci Resolve 16

1508177128_1366318 I have been working on some video editing using DaVinci Resolve 16 for the Tutorial videos I have been posting on YouTube. One of the most used effect in tutorial videos is the pop-out effect (I don’t really know the exact name) where a portion of the screen is cut and enlarged while the rest of the screen is darkened to bring the focus to that particular area of the frame.


This is really useful to bring the attention of the user to a particular area on the screen. I have searched the internet and haven’t found the right tutorial to do it. Finally after much trial and error I figure out a Fusion graph that will get it done.



  1. Go to the start of the clip
  2. Add a rectangle node (or any shape for that matter)
  3. Create a keyframe. Adjust the rectangle to the area to popout
  4. Add a transform node between the MediaIn and MediaOut
  5. Add a keyframe with default values on the first frame
  6. Connect the rectangle as the mask for the Transform Node
  7. Add a Color Gain node after the transform and add a keyframe, set Lock the RGB values and set the gain to 0.5
  8. Connect the rectangle to the Color Gain and Use the Apply Inverted Mask option on the mask tab in inspector
  9. Move to the end of the effect (something like frame 30)
  10. Adjust the transform size and position
  11. Match the size and position of the rectangle
  12. Play, test and adjust for any artifacts.