I am a big fan of investing in index based funds. There are some reasons for this:1.It is very difficult for a fund manager to outperform the market on a consistent basis (hence the mandatory disclosure that past performance is not indicative of future performance). With an index fund, all the manager has to do is invest in the index stocks in same ratio and let the market do the rest.
2.Investment is restricted to the stocks in the market index. The fund manager cannot invest anywhere else. For an investor, there is this comfort of knowing that investments will be made in known companies. In contrast, traditional funds invest in a variety of stocks (midcaps, specific sectors, emerging stocks etc). Quite often, some stocks don't move or later turn out to be non-investment grade.
3.Management fees for a traditional mutual fund are far higher than that of an index fund (passive management is always easier than active management and does not call for any intelligence).
4.Almost all index based funds are now traded as ETF (exchange traded fund)... this means you can buy and sell it in market hours and get current rate (mutual fund investment is on NAV basis which changes once a day).
Strategy:
The SIP route is the best as it eliminates the hassles of attempting to time the market and also takes care of money management.
Decide on a fixed sum say Rs.5000/- per month and start investing for min 2-3 years. We are at 5500 levels and off 10% from the peak. Any correction will be limited to 4400-4500 so you will buy more units on declines (as investment amount is fixed). If there is no correction and markets blast off from current levels you are still investing near the lows.
More info at the NSE website
Is there any bankbees? Sir.
ReplyDeleteyes... But from an investment perspective, it does not make sense to invest in a sector and ignore everything else.
DeleteU R RIGHT BUT THERE R NO DISIPLINE IN PERTICULAR CLIENT
DeleteKPL ji - mm..savings is there in "indian blood" :) hence v r not facing much problem like US or europe. LIC's market plan the worst one..since 5 years there is not much profit.. the hell i can say. this post office scheme is better money doubled. for steady and hassle free income i prefer cumulative deposit scheme. automatically 1/4 , 1/2 yearly can get interest. some as FDs..
ReplyDeletefinally any buy signal as per your system???
tks nd regds
KPL Sir,Thanks for your information of Nifty Bees, its very interesting and seems to be safe investment for investors who do not have time to track their investment on daily or weekly basis. Please keep on sharing your wisdom with us!
ReplyDeleteA.Vohra
KPL Sir,Thanks for sharing your wisdom of Nifty Bees. I found this very interesting as I donot have time to keep track on investments on daily or weekly basis.This is the safest investment as we know that Indian ecnomy will recover sooner than later and Nifty can easily touch 6500 within a year.
ReplyDeleteA.Vohra
I am looking at NIFTY 10000+ in next 4-5 years
DeleteI see NIFTY formed ascending triangle. Based on the principles, i expect to see NIFTY at 10000 in the next 2 years before big Market crash. I am not sure which sector will play a key role in it.
Deletewow... 10000 on the nifty.. that certainlymade me smile :) and should make a lot others too ::)
DeleteKPL Sir, Nifty Bees Goldman Sachs, Is it the same nifty bees you are reffering?
ReplyDeleteYes
DeleteKPL Sir, can we do short term/swing trading in Nifty Bees ? What would be tax implications ?
ReplyDeleteYou can but it is not worth the effort.
DeleteTax implication would be same like trading in any other stock (speculation)
I have a query.I am a small investor who want to invest in stocks on SIP basis.I am willing to put 2k every month.But I dont know which stocks should I put my money.When market is falling every stock is looking attractive to buy.I want only blue chips.I have Nifty Bees also with me. Should I continue investing in Nifty Bees because i have too much confusion in stock selection.Kindly advise sir.
ReplyDelete2K pm is too small to do SIP in stocks... better continue with NIFTYBEES
DeleteSIR CAN NIFTY BEE USED FOR TRADING PURPOSE IF YES PLEASE CLERIFY. THANKS.
ReplyDeleteLegally yes. In practice, it does not make sense as volumes are not that high for daytrading.
Deleterespect sir ;
ReplyDeletehow to trade in 30 years t-bond?and what are Index Total Returns Index Principal Returns index Avg. Coupon Avg. Residual Maturity Portfolio YTM Portfolio Duration Portfolio Modified Duration Portfolio Convexity?
http://www.nseindia.com/products/content/debt/wdm/gove_sec_index.htm
thanks and regards
No idea absolutely... I have not dealt in these instruments.
Delete