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harper
21-01-2014, 08:45 AM
As a newbie the rise and fall of the NZX index is almost meaningless to me because I have no sense of the relative changes. I can read from the NZX chart that over time the index has risen with relatively minor peaks and troughs over the long-term. What I can't figure out is whether a 0.07 percentage change is a relatively large or small turnover i.e. what's normal? what's the largest ever for the month, year, entire record? are this changes increasing?

Is there a website where I can get statistics on the changes over time both in terms of absolute change and percentage change?

Another thing I thought might be useful are markers/lines along the time axis associated with announcements/significant events. Is there a website which tracks say a companies share price and marks it's announcements along the time axis?

Cheers

Harvey Specter
21-01-2014, 08:48 AM
Lets say you can get 3% interest in the bank, pretty much risk free. You want to do better than that to compensate for risk in the sharemarket. So say over 10% a year is OK, but over 20% is better. Divide by 12 to get a monthly amount.

harper
21-01-2014, 02:51 PM
Yep, I understand the calculation but in terms of the 'NZX percentage daily change' how do you know whether a 0.07% increase is a large turnover without knowing how it compares to historical changes. For bank interest rates I can compare rates over 20 years to determine how current levels sit.

Thanks

Harvey Specter
21-01-2014, 03:08 PM
I asume you mean index change as opposed to turnover/volume?

go do the bottom and click download spreadsheet: http://uk.finance.yahoo.com/q/hp?s=%5ENZ50 for the daily index value to do your calcs on.

harper
22-01-2014, 05:08 AM
Thanks, both bits of information are the sort of thing I'm trying to understand. Cheers

winner69
22-01-2014, 07:19 AM
Since April 2004 NZX50 gone from 2631 to 4800 odd

Average daily price movement has been 0.03%

54% of the days have been up with 46% down or unchanged

33% of the time the price changes have been in the range -0.25% to +0.25%

Pretty much a normal distribution of price changes slightly skewed to the positive

Pretty boring eh

What you trying to show to work out harper?

Harvey Specter
22-01-2014, 07:25 AM
One of the books I read over the summer used average trading range to determine stop losses and position sizing.

winner69
22-01-2014, 07:55 AM
This is incorporated into the index known as the VIX. I dont think there is one for the NZX but there is for the US and Australian markets which you can use as a proxy. The VIX is a measure of the overall market volatility - a low VIX is a stable market and the daily changes are normal, a high VIX means that the drops/rises are abnormal.

http://www.asx.com.au/education/investor-update-newsletter/201311-asx-monthly-a-vix-report.htm

Good to see there is a VIX for the ASX

So boring times ahead with a VIX of 11.6 at the moment

Implies the expected return of the ASX to be +/- 3.3% over the next 30 days ............ boring eh

harper
07-02-2014, 02:22 PM
Since April 2004 NZX50 gone from 2631 to 4800 odd

Average daily price movement has been 0.03%

54% of the days have been up with 46% down or unchanged

33% of the time the price changes have been in the range -0.25% to +0.25%

Pretty much a normal distribution of price changes slightly skewed to the positive

Pretty boring eh

What you trying to show to work out harper?

Thanks for that winner. All I'm simply trying to do is get a feel for typical movements in the market so I know what to expect when something significant happens. As a newbie the numbers are a little bit meaningless at the moment. it's quite interesting to see how volatile the market can actually be. For example, if I interpret this correctly, the NZX dropped about 70% between 2007-2009 (wow - that must freak you out!) but then it has risen about 85% since 2009!

The descriptive stats I performed suggested my data was negative skewed which doesn't make sense to me - if there is positive growth i.e. more gains than loss over time, shouldn't it be positively skewed as you suggested?

Anyway thanks for you help.



It may seem stupid but I want to write myself fortnightly reports on the performance of the markets as a way to keep myself informed. I already get some e-letters which I can use but I want to tailor the report to my portfolio (when I eventually invest).