The Year-end V-Theory — Will it Play Out Again This Year?

Right now, there is no shortage of triggers for market volatility — geopolitics, currency movements, commodity swings…

But even in these unpredictable times, the “Year-end V-Theory” could present an opportunity.

For those who may not have read or do not recall my earlier V-Theory posts, the idea is fairly simple:

Just before the financial year closes, some stocks — particularly from the broader market — tend to get sold down sharply. This can happen for a variety of reasons: tax considerations, portfolio clean-ups, booking of losses, or simple rebalancing by institutions.

Once the new financial year begins, many of these stocks often bounce back — sometimes quite sharply — creating what looks like a narrow V-shaped move on the chart.

To explore this idea, over the past two years, we’ve looked at the Nifty 500 universe (after excluding the top 100 stocks) in search of stocks that conform to the theory. By applying a few filters — valuations, annual price highs/lows, beta, amongst others — my team and I curated a basket of stocks, in March 2024 and March 2025.

March 2025 V-Theory post: https://tinyurl.com/bdvhne8
March 2024 V-Theory post: https://lnkd.in/gAEYHTVW

In both cases, the basket delivered returns of over 10% within a few weeks, as the ‘financial year-end V’ played out. For best results, all the stocks in the basket must be bought together and sold together too.

Of course, markets may not repeat themselves year after year.
But human behaviour around the year-end tends to.

So once again this year, we’re sharing the list of ‘Year-end V-Theory’ stocks in the image.

For clients using our new app, we’ve curated a basket called V-theory comprising these 16 stocks under the ‘Wealth Builder Portfolio’ feature, for ease of execution.

𝐷𝑖𝑠𝑐𝑙𝑎𝑖𝑚𝑒𝑟: 𝑇ℎ𝑖𝑠 𝑝𝑜𝑠𝑡 𝑖𝑠 𝑓𝑜𝑟 𝑖𝑛𝑓𝑜𝑟𝑚𝑎𝑡𝑖𝑜𝑛 𝑝𝑢𝑟𝑝𝑜𝑠𝑒𝑠 𝑜𝑛𝑙𝑦 & 𝑎𝑛𝑦𝑡ℎ𝑖𝑛𝑔 𝑚𝑒𝑛𝑡𝑖𝑜𝑛𝑒𝑑 ℎ𝑒𝑟𝑒𝑖𝑛 𝑠ℎ𝑜𝑢𝑙𝑑 𝑛𝑜𝑡 𝑏𝑒 𝑐𝑜𝑛𝑠𝑡𝑟𝑢𝑒𝑑 𝑎𝑠 𝑎 𝑓𝑢𝑛𝑑𝑎𝑚𝑒𝑛𝑡𝑎𝑙 𝑟𝑒𝑎𝑠𝑜𝑛 𝑡𝑜 𝑏𝑢𝑦/ℎ𝑜𝑙𝑑/𝑠𝑒𝑙𝑙 𝑎𝑛𝑦 𝑠𝑡𝑜𝑐𝑘. 𝐼𝑛𝑣𝑒𝑠𝑡𝑚𝑒𝑛𝑡𝑠 𝑖𝑛 𝑠𝑒𝑐𝑢𝑟𝑖𝑡𝑖𝑒𝑠 𝑚𝑎𝑟𝑘𝑒𝑡𝑠 𝑎𝑟𝑒 𝑠𝑢𝑏𝑗𝑒𝑐𝑡 𝑡𝑜 𝑚𝑎𝑟𝑘𝑒𝑡 𝑟𝑖𝑠𝑘𝑠, 𝑟𝑒𝑎𝑑 𝑎𝑙𝑙 𝑡ℎ𝑒 𝑟𝑒𝑙𝑎𝑡𝑒𝑑 𝑑𝑜𝑐𝑢𝑚𝑒𝑛𝑡𝑠 𝑐𝑎𝑟𝑒𝑓𝑢𝑙𝑙𝑦 &/𝑜𝑟 𝑐𝑜𝑛𝑠𝑢𝑙𝑡 𝑦𝑜𝑢𝑟 𝑎𝑑𝑣𝑖𝑠𝑜𝑟 𝑏𝑒𝑓𝑜𝑟𝑒 𝑖𝑛𝑣𝑒𝑠𝑡𝑖𝑛𝑔.