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DOES FOOLISH FOUR WORK IN INDIAN EQUITY MARKET?

B. M. Kanahalli, Sachin Balbhimrao

Abstract


Foolish Four strategy is one of the most cockamamie stocks picking formula developed in the mid 90’s by the Motley fool website. This strategy consists of investing equal amount in each of the top 4 stocks of a market index which results of high dividend yield to square root of stock price dropping one that scored highest. To examine its effectiveness, we applied this strategy to Nifty 50 Index over a period of 5 years (2006 to 2011). This research paper proves the fact that, Foolish four performs better over Nifty Index over a study period. Hence, this study identifies Foolish Four  as one of the stock picking strategy for retail and Institutional investors.


Keywords


Foolish Four, Volatility, Return on Investment, Equity Market, ROI, Indian Equity Market

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References


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