Investment Strategy 5: S & P CNX 500 low P/E

This strategy is based on Jeremy Siegel’s research on the S&P 500 from 1957-2010. He found that the lowest 20% of the stocks sorted by P/E ratio outperformed the S&P 500 by 3% per year.

  • We are going to apply this to the Indian market. The index we shall use is the S&P CNX 500.
  • We shall exclude stocks which have 0 or negative P/E ratios.
  • We shall select the lowest 20% of the stocks by P/E ratio
  • We shall hold them for a year and repeat the process.

The stocks selected (on 23/12/2012) are shown in this spread sheet.

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