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