Best time to Invest in Stocks, have chance to make 100x returns!!

Dated- Oct 14, 2025

A recent long-term study by Capitalmind Mutual Fund has thrown up a surprising insight into stock market returns in India, particularly in the Nifty 50: over many years, almost the entirety of the gains has come from what happens outside the regular trading hours rather than during them. The analysis implies that if an investor had been buying Nifty stocks every day at the market close and then selling them at the next morning’s open, their wealth over the past two decades-plus would have multiplied nearly 100-fold. In stark contrast, an alternative strategy of buying at the opening bell and selling at the close of the trading day would have resulted in a substantial loss over the same period — about 84 % of the investment wiped out. This remarkable asymmetry highlights that overnight moves have contributed the bulk of long-term returns, whereas intraday movement has generally been a drag.

The data used in the analysis spans from roughly January 2000 through to mid-2023, a period of about 23 years. At the start, the Nifty was at around 1,592 points, and by July 2023 it had risen to about 25,057 points, a raw increase of 23,465 points. However, when the return components are broken down, we see that overnight gains (i.e., the rise from one day’s close to the next day’s open) added up to 39,084 points over that timeframe, thereby exceeding the raw rise. But intraday moves (from market open to market close each day) actually contributed negative 15,620 points — i.e. over the long term, trading during active hours would have lost money. 

Capitalmind emphasises that the median annual return from overnight periods during this span has been around 5.7 %, whereas the intraday component has delivered around 2.4 %, and dividends added about 1.4 % annually. It’s the overnight return that is doing almost all the heavy lifting for long-term index gains. 

What are the implications of this insight? For long-term investors, it appears that holding through market closings and reaping the overnight prices is far more significant than trying to pick moments during the trading day. The market tends to decline, on aggregate, during open-to-close hours, or at least those moves do not compensate for the losses incurred, whereas between market close and the next open, there is typically a positive drift.

This does not mean intraday trading is always bad, or that one should avoid it entirely; for short-term traders, volatility during the day is a playground. But for someone whose horizon is long, someone who seeks compounding and who does not want to constantly monitor price movements, this study suggests they would have been far better off committing to being invested through the overnight gap rather than trying to time the market’s open or exit intraday.

There are various possible reasons for this pattern. Overnight, markets respond to news that emerges after hours, globally and locally; corporate earnings announcements, macroeconomic data, geopolitical developments, policy announcements, all of which often occur after market close. Also, liquidity tends to be lower in those periods (or the next morning), which can exaggerate price gaps. Additionally, many institutional and retail investors may be reluctant to trade at certain times, possibly reducing competition and allowing drift to accumulate. During market hours, by contrast, many actors (including algorithmic, institutional, high frequency) are active, and competition can act to dissipate trends, or reverse moves that had started overnight. Also, intraday costs (spread, slippage, transaction fees) penalize high frequency entry-exit strategies.

Capitalmind also has written earlier about how “markets actually make money when you sleep” — the idea being that if you look at “intraday moves” (open to close) vs “overnight moves” (close to next open), over time the sum total of intraday moves is negative or at least much weaker, whereas overnight moves contribute positively and quite strongly. 

What are some caveats? First, past performance is not a guarantee of future returns. Just because overnight moves have driven gains in the past does not mean the same behaviour will continue. The market structure, regulation, participants’ behaviour, information flow, and global linkages can evolve. Second, being exposed overnight comes with its own risks — unexpected global shocks, macroeconomic surprises, policy shifts, regulatory changes, or events that happen while local markets are closed. The potential for gap downs at the next open can lead to losses. Third, transaction costs, taxes, and liquidity constraints can reduce actual realised returns; particularly for smaller investors, the cost of buying at close and selling at open, or vice versa, might be non-trivial. Fourth, this is an index-level observation; performance for individual stocks may differ significantly. Some stocks may perform better intraday; others may not move much overnight.

Nevertheless, the magnitude of the difference is too large to ignore. Multiplying wealth by 100× vs losing 84 % defines a huge gulf. It forces rethinking of what “market timing” means, or whether trying to trade daily is worth it. For many, the simplest strategy of buying and holding through the close, not worrying about the open vs close, might actually outperform complicated trading strategies when accounting for costs, time, and risk.

In conclusion, the Capitalmind study reveals that the best time for people to invest in Nifty stocks, if they want the opportunity for enormous long-term gains, has been in the overnight periods — buying at market close and holding until the next morning’s open. Those periods have overwhelmingly accounted for positive returns, whereas intraday periods have, on aggregate, been loss-making or flat. For long-term investors, this suggests that trying to beat the market during trading hours is less important than ensuring exposure through the nights. It is easier said than done, given operational, psychological, and risk considerations, but the lesson seems clear: for compounding wealth over decades, be invested through the nights.

Written by- Akash Paul

Nobel Prize in Economic Sciences 2025

Dated- 13 Oct, 2025

The Nobel Prize in Economic Sciences for 2025 has been conferred upon Joel Mokyr, Philippe Aghion, and Peter Howitt for their profound and transformative contributions to the understanding of innovation-driven economic growth. The Royal Swedish Academy of Sciences announced that the trio’s combined body of work has not only illuminated the mechanisms through which innovation sustains prosperity but has also reshaped contemporary economic thought on how societies progress. The award is a testament to the intellectual evolution of growth theory over the last half-century, a field once dominated by static models of capital accumulation but now invigorated by the dynamic interplay of ideas, institutions, and creative destruction. In a century where artificial intelligence, green technologies, and globalisation continue to redefine economies, the selection of Mokyr, Aghion, and Howitt could hardly have been more relevant. Their research underscores that economic growth is neither linear nor inevitable—it is a fragile, cumulative process dependent upon the constant generation, diffusion, and renewal of ideas.

Joel Mokyr, a Dutch-born economic historian teaching at Northwestern University, has long sought to answer one of the grandest questions in human inquiry: why did modern economic growth begin when and where it did? His scholarship, most notably in works such as The Lever of Riches and The Gifts of Athena, integrates history, culture, and epistemology into the study of technological progress. Mokyr has argued that the Industrial Revolution was not merely the product of mechanical invention but of a profound change in the culture of knowledge—the emergence of what he terms the “Republic of Letters.” According to him, Europe’s intellectual transformation between the seventeenth and eighteenth centuries created a climate where inquiry, experimentation, and rational discourse became socially sanctioned. It was this cultural infrastructure, rather than any sudden material leap, that allowed innovation to flourish. Mokyr’s contribution lies in repositioning culture and ideas at the centre of economic transformation, challenging traditional growth models that reduce innovation to mere investment decisions. His analysis of the interaction between knowledge and institutions provides a historically grounded yet universally applicable explanation for why some societies escape stagnation while others remain trapped in technological inertia.

In contrast, Philippe Aghion and Peter Howitt, both trained in the analytical rigour of mathematical economics, approached the question from a theoretical perspective that transformed modern macroeconomics. Their seminal collaboration produced the Schumpeterian model of growth through creative destruction, a formalisation of Joseph Schumpeter’s early twentieth-century insights into capitalism’s dynamic essence. Published in the early 1990s, their model replaced the static equilibrium assumptions of earlier growth theories with a perpetually evolving framework in which innovation continuously disrupts existing technologies and business structures. In this model, entrepreneurs and firms compete not merely in markets for goods but in markets for ideas, each seeking to outpace rivals through discovery. Innovation, therefore, becomes both the engine of growth and the mechanism of obsolescence.

Aghion and Howitt’s approach allowed economists to quantify the impact of policy, competition, and education on long-term productivity. Their model elegantly captured the paradox that economic progress is inherently disruptive—innovation enriches society as a whole but simultaneously displaces workers, industries, and ideas. This theoretical architecture has informed not only academic research but also policy frameworks adopted by institutions such as the OECD, the European Commission, and the World Bank. Their work made it possible to analyse how patent laws, R&D subsidies, or market structures affect the incentives to innovate and, by extension, a nation’s long-term prosperity. The so-called “Aghion–Howitt model” thus bridged the gap between abstract theory and practical policymaking.

While Mokyr provided the historical and cultural context for how innovation cultures emerge, Aghion and Howitt supplied the mathematical backbone for understanding how they sustain economic dynamism. Together, the three laureates embody the convergence of disciplines—history, theory, and policy—that defines modern economics. Their selection for the 2025 Nobel Prize in Economic Sciences underscores the importance of interdisciplinarity in addressing humanity’s most persistent challenge: sustaining growth in a finite and uncertain world.

The announcement from Stockholm was greeted with widespread acclaim, as economists, policymakers, and commentators hailed the choice as both intellectually rigorous and socially relevant. In its citation, the Nobel Committee praised the laureates “for establishing the foundations of an innovation-based understanding of long-run economic growth and for demonstrating that the progress of nations rests upon the capacity to generate, disseminate, and apply new knowledge.” The Committee also highlighted the relevance of their work in an era marked by technological disruption, climate change, and inequality. The laureates, it observed, have collectively demonstrated that innovation is not self-sustaining; it demands a delicate balance of freedom, competition, and institutional support.

Indeed, one of the most enduring insights from their collective research is the recognition that innovation is both creative and destructive—a duality that defines the modern economy. Aghion and Howitt’s concept of creative destruction captures this paradox with exceptional clarity. As new technologies emerge, they displace older ones, forcing economies to adapt or risk obsolescence. Mokyr’s historical perspective complements this by reminding us that societies that fail to institutionalise curiosity and learning eventually succumb to stagnation. Together, they form a coherent narrative: economic progress is a process of perpetual renewal, dependent not merely on invention but on the willingness of societies to embrace change.

This intellectual framework has had far-reaching implications for how we understand contemporary economic challenges. The laureates’ insights are directly applicable to questions of climate policy, automation, and artificial intelligence. As the world faces the twin imperatives of decarbonisation and digital transformation, their work suggests that long-term prosperity will hinge on the capacity to innovate responsibly and inclusively. Aghion, in his more recent writings, has argued that the same competitive forces that drive technological progress can be harnessed to accelerate green innovation—provided that policymakers create the right incentives. Howitt, similarly, has examined how education and labour-market policies can mitigate the social disruptions caused by technological change. Mokyr’s historical reflections remind us that societies which fear innovation often succumb to decline.

The trio’s recognition also signals a philosophical shift in how economics understands growth. Traditional models, such as those developed by Solow and Swan in the mid-twentieth century, viewed technological progress as an exogenous factor—something that simply “happened.” Aghion and Howitt’s endogenous growth framework made innovation an internal feature of the economy, driven by purposeful investment and institutional design. Mokyr’s historical approach enriched this theory by demonstrating how cultural attitudes towards knowledge and experimentation determine whether an economy can sustain innovation over centuries. The combined effect of their work is a holistic model in which growth is understood as both a cultural and economic phenomenon.

The 2025 Nobel Prize in Economics also serves as an implicit commentary on the global economic mood. As many nations grapple with sluggish productivity growth, political polarisation, and fears of technological displacement, the laureates’ research offers a note of both caution and optimism. It cautions that progress cannot be taken for granted—complacency, protectionism, and fear of disruption can easily lead to stagnation. Yet it also offers hope that, through sound institutions and a commitment to knowledge, societies can regenerate their engines of growth. In the words of Aghion during the Nobel press conference, “Innovation is not the privilege of the past; it is the promise of the future.”

Beyond the academy, the practical resonance of this Nobel Prize is significant. Policymakers across the world are currently struggling to balance the imperatives of technological advancement with social stability. The laureates’ frameworks suggest that inclusive innovation—supported by education, fair competition, and equitable opportunity—offers the best route forward. Their research implies that innovation should not be feared as a destroyer of jobs, but rather managed as a process that redefines them. This view aligns with historical experience: the same industrial revolutions that once displaced millions of workers eventually created vastly more employment and higher living standards. Mokyr’s meticulous studies of industrial history reveal that resistance to change often stemmed not from innovation itself but from institutions ill-equipped to absorb it.

The interdisciplinary scope of their work also expands the horizons of economics. By blending quantitative modelling with historical and philosophical inquiry, the laureates bridge the long-standing divide between the sciences and the humanities. Mokyr’s use of archival evidence and intellectual history challenges economists to think beyond equations, while Aghion and Howitt’s models give mathematical expression to ideas once considered intangible. This cross-pollination has enriched both fields, giving rise to a more humanistic form of economic reasoning—one that recognises the role of imagination, uncertainty, and cultural context.

Critics of growth theory have long argued that the relentless pursuit of innovation risks environmental degradation and social inequality. Yet, interestingly, the laureates’ work accommodates these critiques by revealing that sustainable innovation depends upon inclusivity and adaptability. Aghion’s later research explicitly connects innovation to environmental policy, suggesting that green technologies will flourish not through coercion but through competition and creativity. Mokyr’s historical perspective reinforces this, showing that societies which channel their inventive energies towards collective welfare tend to endure, while those that weaponise innovation for dominance or exploitation decline. Howitt’s contributions, particularly in labour economics, further demonstrate that human capital—education, skills, and adaptability—is the linchpin of sustainable progress.

The trio’s joint Nobel Prize is thus not merely a recognition of past scholarship but a manifesto for the future of economics. It urges policymakers to view innovation as a systemic process rather than a spontaneous event, and to design institutions that nurture rather than stifle creativity. It also invites citizens to embrace change as the natural rhythm of modern life, to see in disruption not chaos but renewal.

From a broader intellectual standpoint, the 2025 award continues the Nobel tradition of celebrating economists who bridge the theoretical and the practical. Just as Paul Romer’s 2018 Nobel recognised the incorporation of technological innovation into macroeconomic analysis, and Esther Duflo’s 2019 award honoured the experimental turn in development economics, the Mokyr–Aghion–Howitt award signifies the maturation of growth theory into a field that unites history, mathematics, and moral imagination. It reaffirms that economics, at its best, is not a narrow science of numbers but a study of civilisation itself.

Public reaction to the announcement has been largely celebratory. Commentators in the Financial Times, Reuters, and The Economist praised the Nobel Committee for acknowledging the intellectual lineage that connects historical insight with modern theory. Many noted that Mokyr’s cultural analysis adds a much-needed dimension to the mathematically inclined discipline, reminding us that progress originates in the human mind and social context, not merely in capital flows or fiscal policies. Students of economics across the world have hailed the decision as a call to broaden the discipline’s horizons—to study literature, history, and philosophy alongside econometrics.

As the laureates themselves reflected in post-announcement interviews, the central message of their work is one of stewardship. Innovation, they insist, is not a force of nature but a responsibility. Societies that wish to remain prosperous must cultivate openness, curiosity, and resilience. They must invest in education not only as a means of producing workers but as a way of nurturing thinkers. They must ensure that markets reward experimentation without entrenching monopolies. And they must recognise that progress, while disruptive, is the foundation of freedom itself.

The 2025 Nobel Prize in Economic Sciences, therefore, symbolises more than a scholarly honour. It encapsulates the enduring human aspiration to understand and improve the mechanisms of progress. It affirms that innovation—whether technological, social, or cultural—is the most powerful antidote to despair. In honouring Mokyr, Aghion, and Howitt, the Nobel Committee has effectively honoured the idea that progress must be understood, nurtured, and defended.

As the world navigates a turbulent transition marked by digital revolutions, environmental constraints, and geopolitical fragmentation, the laureates’ message could not be timelier. Economic growth, they remind us, is not simply a matter of producing more, but of thinking better. It depends upon the courage to question old assumptions, the willingness to embrace uncertainty, and the moral conviction to direct innovation towards human flourishing. The Nobel Prize in Economics 2025 is thus both a recognition of past brilliance and a clarion call to future generations. It invites economists, policymakers, and citizens alike to imagine a future where knowledge, creativity, and cooperation continue to be the engines of prosperity.

In this light, the award is not merely about economics; it is about civilisation itself. The laureates’ collective wisdom teaches that societies rise not through accumulation but through imagination, not through imitation but through inquiry. Innovation, in their vision, is the lifeblood of humanity’s continuous ascent. The 2025 Nobel Prize in Economics celebrates that enduring truth, reminding the world that progress—though fragile—is forever possible when curiosity meets courage.

Written by- Akash Paul

Day 3: Functions of Money and Role of RBI in Monetary Policy

Dated- 3rd Oct, 2025

Money is often perceived as a simple medium of exchange, something that flows effortlessly in daily life, exchanged for goods, services, and securities. Yet, behind this seemingly simple tool lies one of the most significant inventions of human civilisation. The concept of money transcends its physical or digital forms, reflecting deep economic, social, and political dimensions. From ancient barter systems to the modern digital rupee, money has evolved into a sophisticated instrument that supports global economies and binds societies together. Its functions provide the foundation of modern economic systems, and in the Indian context, its regulation and stability are ensured through the vigilant role of the Reserve Bank of India, the guardian of monetary policy.

When discussing the functions of money, it is vital to recall that money is not merely coins and currency notes. It is any object or record that is universally accepted as payment for goods, services, or repayment of debt. It derives its importance from collective trust, since its acceptance is based on confidence rather than intrinsic value. Economists have long explored this dynamic, and in modern economies, the functions of money extend beyond day-to-day transactions, deeply shaping savings, investment, and growth patterns. In India, these functions are interwoven with the policies of the Reserve Bank of India, which acts as the custodian of the monetary framework, maintaining stability and promoting economic growth through precise and calculated interventions.

One of the most fundamental functions of money lies in its role as a medium of exchange. In earlier ages, barter systems dominated economic transactions, but they were plagued with inefficiencies such as the double coincidence of wants. For instance, a farmer growing rice may have desired cloth, but unless the weaver simultaneously needed rice, the exchange would not occur. Money eradicated this inefficiency by becoming the common medium accepted universally. In contemporary economies, the Indian rupee ensures that such exchanges take place seamlessly. From the smallest vendor in rural markets to the largest corporations, transactions occur efficiently because of the faith embedded in money’s role.

The second important function of money is that it serves as a unit of account. Every economy requires a standard measure by which values of goods, services, and assets can be compared. Money provides this stability. In India, when goods are priced in rupees, it creates a clear system of valuation, allowing consumers and producers to make informed decisions. Without this function, economic life would be chaotic, as no stable system of measurement would exist. The role of money as a unit of account also allows the government and financial institutions to assess national income, inflation, GDP growth, and other indicators critical for policy-making.

Money also performs the vital function of being a store of value. In societies where inflation is controlled and economic confidence exists, money retains its purchasing power over time, enabling individuals and businesses to store wealth for future use. For example, a farmer who sells produce today can preserve the value of earnings by holding money rather than being forced to consume or barter immediately. This function of storing value facilitates saving and investment, which are cornerstones of economic development. However, this function is heavily reliant on price stability, and it is here that the Reserve Bank of India’s role in monetary policy becomes indispensable. Through various tools and mechanisms, the RBI ensures that inflation remains within manageable levels so that money continues to serve as a reliable store of value for millions of households and businesses.

A fourth function of money lies in its role as a standard of deferred payment. Modern economies thrive on credit, loans, and promises of future repayment. Money makes this possible by creating a universally accepted standard by which such obligations are measured and repaid. From large-scale infrastructure loans to small consumer credit purchases, money enables deferred payments with trust and stability. In India, the banking sector has expanded enormously to extend credit to industries, start-ups, and individuals, all made possible by the standardised role of the rupee.

While these core functions appear self-evident, they are deeply connected with the monetary policy of a nation, because money without regulation can destabilise economies. The stability, trust, and efficiency of money are ensured by institutions like the Reserve Bank of India, which acts as the apex monetary authority. Since its establishment in 1935, the RBI has not only been a custodian of currency but also the architect of India’s monetary framework. It controls the supply of money, manages inflation, regulates credit, and ensures financial stability, all while balancing the competing demands of growth and stability.

The role of the RBI in monetary policy is multifaceted and often complex. At its core, monetary policy refers to the process by which the central bank manages money supply and interest rates to achieve macroeconomic objectives. These objectives typically include controlling inflation, stabilising currency, ensuring liquidity, and fostering economic growth. In India’s case, the RBI navigates a diverse and dynamic economy, balancing agricultural needs, industrial aspirations, and global shocks.

Inflation management is one of the most visible roles of the RBI. Inflation, the rise in prices of goods and services, directly erodes the purchasing power of money. High inflation makes money an unreliable store of value, reducing trust and harming savers. On the other hand, excessively low inflation or deflation can reduce consumer spending, harming growth. The RBI uses monetary policy tools such as the repo rate, reverse repo rate, and cash reserve ratio to influence inflation. By raising interest rates, it can reduce borrowing and spending, cooling inflation. Conversely, by lowering rates, it stimulates investment and consumption. In this way, the RBI directly supports the essential functions of money by safeguarding its role as a stable store of value.

Beyond inflation, the RBI also manages the supply of money in circulation. Too much money can create overheating in the economy, while too little can stifle growth. Through open market operations and reserve requirements, the RBI regulates liquidity, ensuring that the economy has the right balance. This role becomes especially critical in times of global financial volatility. For example, during the COVID-19 pandemic, the RBI adopted accommodative stances, injecting liquidity to sustain businesses and households through unprecedented challenges.

Another dimension of RBI’s role is in regulating credit. By guiding commercial banks, the RBI influences the flow of credit to priority sectors such as agriculture, small industries, and infrastructure. Money in these areas is not just an instrument of trade but a catalyst for inclusive development. By ensuring equitable credit distribution, the RBI transforms money into a tool of social as well as economic justice.

Exchange rate management is another arena where the RBI’s monetary policy intersects with money’s functions. As India participates in global trade, the value of the rupee against foreign currencies determines the competitiveness of exports and the affordability of imports. By intervening in foreign exchange markets, the RBI maintains relative stability of the rupee, ensuring that international trade continues smoothly. This further reinforces money’s credibility, both domestically and globally.

Monetary policy also directly influences investment patterns and economic growth. When the RBI lowers interest rates, businesses find it easier to borrow for expansion, and individuals are encouraged to take loans for homes, vehicles, and education. This stimulates demand, creating a multiplier effect across sectors. Conversely, tightening policy helps prevent bubbles and overheating. The fine balance between growth and inflation reflects the nuanced role of the RBI, which constantly evaluates global conditions, domestic production, and fiscal policies to make informed decisions.

In recent years, the digital transformation of money has brought new challenges and opportunities for the RBI. Digital transactions, UPI platforms, and fintech innovations have redefined the way money is exchanged, stored, and utilised. While the core functions of money remain unchanged, their manifestation has evolved. The RBI has embraced these changes by promoting digital payment infrastructure, encouraging innovation, and simultaneously safeguarding financial stability. Its pilot project on the Central Bank Digital Currency (CBDC) demonstrates foresight in aligning the future of money with regulatory oversight.

The RBI’s role in sustaining public confidence is also crucial. Money, after all, operates on trust. If citizens lose faith in the currency, even the most advanced monetary tools become ineffective. By maintaining credibility through transparency, communication, and sound policy, the RBI strengthens this trust, ensuring that money continues to perform its functions seamlessly.

The interrelationship between money’s functions and the RBI’s monetary policy underscores a fundamental truth: economic stability is not accidental but carefully curated. Money allows for efficient exchange, accurate valuation, wealth storage, and future planning, but only when supported by a strong institutional framework. The RBI provides this framework for India, adapting continuously to global and domestic shifts.

In conclusion, the functions of money may appear universal and timeless, yet their effective realisation depends on the vigilance of central authorities. In India, the Reserve Bank’s role is indispensable in preserving the value and trust associated with the rupee. Through monetary policy, the RBI shapes inflation, manages liquidity, regulates credit, and stabilises exchange rates, ensuring that money continues to fuel growth and development. As India progresses in the twenty-first century, facing challenges such as global economic integration, digitalisation, and climate-linked risks, the functions of money will remain central to daily life, while the RBI’s stewardship will define how effectively these functions contribute to prosperity. Money and monetary policy are thus inseparable, forming the foundation of modern economic governance, and their interplay will continue to shape India’s economic destiny for generations to come.

Written by- Akash Paul

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