The "ETF Shop" Strategy

Transform your approach from speculative trading to a disciplined, retail-business mindset. Inspired by Mahesh Chandra Kaushik.

The Shopkeeper Mindset

Treat Exchange-Traded Funds (ETFs) as "inventory" in a shop. Our goal is consistent, daily-like turnover of this inventory for a profit. We aim for a systematic, rule-based process rather than emotional speculation.

Step 1: Curation

Start with a high-liquidity basket of ~83 Indian ETFs. Filter for daily volumes > 10,000 to ensure easy entry/exit.

Step 2: Capital Discipline

Divide total capital into 60 parts (covering ~3 months of trading). Invest only 1 part per day.

Step 3: Timing

Best executed in the last 30 mins (2:30 PM – 3:15 PM) to avoid mid-day noise and capture stable closing trends.

Core Execution Rules

Daily Selection Protocol

Locate the ETF that has fallen the most relative to its 20-day Moving Average (20-DMA). You are capturing assets at a temporary "discount".

If Rank #1 is not in your shop, BUY 1 NEW PART.
If you hold Rank #1, look at Ranks 2-5. Buy the best one you don't already own.
Rule of Averaging: If you hold all Top 5, buy the one that has dropped >2.5% below your last purchase price.

6%

TARGET PER "INVENTORY LOT"

"Buy when it's stretched down, sell when it recovers to the shelf."

Alpha Enhancements Recommended

While the base 6% target is solid, these expert layers can help exceed the 15-20% annual target:

Exit Optimization (Supertrend)

In strong bull runs, selling at a flat 6% might leave money on the table. Consider selling half at 6% and trailing the rest with a Supertrend indicator to catch 10-15% rallies.

Asset Class Rotation

During equity bear markets, rotation is key. Ensure your basket includes Gold, Silver, and International (Nasdaq/S&P 500) ETFs. This keeps the "6% turnover" alive when domestic stocks are flat.

Idle Cash Management

Since you deploy capital gradually, keep your "un-deployed" cash in Liquid ETFs or Overnight Funds. This adds an extra 5-7% annual interest on the sideline cash, boosting overall CAGR.

Expense Ratio Auditing

Prioritize ETFs with the lowest expense ratios and tracking errors. A 1% difference in fees can compound into a massive difference in returns over 3-5 years.

Risks & Guardrails

LIFO Exits: When fully invested, use LIFO (Last-In-First-Out) to exit specific profitable lots even if the entire holding average isn't at 6%.

Tax Harvesting: Sell loss-making positions (if any) at year-end to offset STCG gains, increasing net profitability.

Mahesh Sir's Velocity: Sell maximum 1 ETF per day to maintain healthy inflow and avoid exiting all capital at once.