Category: Miscellaneous

21 Feb 2023 07:38

Joined:	20/04/2018
Level:	Gold
Points:	55771

Points:	5

Take a look at Index funds as well

When we talk to experts, we learn several tricks from them. Information is power.

Most of us, particularly senior citizens, do not have this power. We are at a loss to understand what is going on in this world. In the world of investment, there is a good avenue called Index funds. This investment relates to the index of the National Stock Exchange, and it is now being learned that if the Sensex goes up, we are bound to make money. There is a bit of downward risk, but since the index fund relates to the best of stocks, one understands that it is possible to have a serious look at index funds.

The returns are in the 13 to 14 percent range. This is a very good return, given the rate of inflation. Hence, it is wise to listen to someone who is very smart and has experience in investing in these stocks. It is pertinent to just go the internet and gather maximum information about this category of funds and who manages them.

#769754

21 Feb 2023 12:25

Joined:	10/12/2016
Level:	Diamond
Points:	109185

Points:	5

A good observation by the author. Index funds are a good choice for the investment. But there are many other funds like equity funds, balance funds, and some hybrid funds which are also gainers if the sensex or nifty rises. So the essence of all investing wisdom is that any fund which invests in top scrips is always benefited when the index rises. That is the main point that is to be understood very clearly.
In a stagnant market or in a choppy market where market swings and goes up and down and remains stagnant, generally share market investments do not give good returns and even the index fund also fails to deliver in such cases. So, knowledge of share market and its fluctuations and its connection to the mutual fund is all a science and one has to critically study them before deciding investments in this more risky but at the same time more return providing area.

Knowledge is power.

#769755

21 Feb 2023 16:44

Joined:	15/05/2014
Level:	Gold
Points:	8742

Points:	4

Not much research is required while investing in Index Funds because here we don't see, Alpha, Beta, Fund Size, NAV, etc. It is because almost all our money is put into the Top 30 stocks of BSE (BSE has 30 stocks in Sensex) or the Top 50 stocks of NSE (NSE has 50 stocks in Nifty). If the Economy performs well, Index Funds will automatically give good returns.

As per the author, if the returns are in the 13 to 14 percent range in Index Funds, our Economy is performing extraordinarily well under our Prime Minister, Mr. Narendra Modi and Finance Minister, Mrs. Nirmal Sitharaman while the whole world is staring at recession.

#769756

21 Feb 2023 17:14

Joined:	25/11/2014
Level:	Diamond
Points:	43292

Points:	5

Reliability of index fund can be understood if the entire economy is on the rise and in such conditions, putting money in this fund can be of immense satisfaction. While we see that that other Asian countries and so is the European countries especially England are reeling severe inflation causing a panic sentiment to the people. Though at present in our country, the level of inflation is under control, but how long we can manage this is difficult to be ascertained. When the job opportunities of the youths are in the declining conditions, prices of essential commodities are on the rise, prices of domestic gas has hardened significantly in the current situation. All these factors can contribute to inflation in the upcoming time. This might affect a drop of prices of index fund and hence the present result might not be the indicator of its smooth performance in future.

#769757

21 Feb 2023 17:30

Joined:	23/09/2015
Level:	Gold
Points:	63032

Points:	3

This is an informative thread. However, I want to remind the potential investors that just as small-cap funds are riskier than large-cap funds, small-cap index funds (as for example, Sensex-500 index) would be more riskier than large-cap index funds (Sensex-50 index).
This factor must be taken into consideration before investing in index funds, especially by those investors who are senior citizens.

{Edited}

(a) Those who have forgotten Noakhali, how can they protest Sandeshkhali?
(b) Have no fear of perfection - you'll never reach it. ---------- Salvador Dali

#769778

22 Feb 2023 16:27

Joined:	02/06/2009
Level:	Diamond
Points:	145337

Points:	4

Index funds are good for better returns but there is factor of risk also. A senior citizen, who depends on the interest he is getting from the investments he made, may not find it safe. Anyhow as advised by the author it is better to understand the subject completely from an expert and then making investment will be better. But we should be careful in selecting the ways. Higher the percentage of returns , higher will be the risk always. One should take this as a fundamental rule.
It is better to put a part of your investment in such index funds and remaining in safe bests like fixed deposits in standard banks. Please know completely about these index funds and get as much information as possible and them take a call for parking some of your money in this instrument.

drrao
always confident

#769817

23 Feb 2023 23:42

Joined:	19/06/2011
Level:	Gold
Points:	87632

Points:	4

As the thread mentions Senior Citizen and their lack of update knowledge, I concur with Dr Rao ( response post #769778 above).

Stock market has the risk of capital erosion, apart from the possibility of nil return. While there can be higher returns . it is not sure and we, retail investors, do not have much control on them. Hence as senior citizens generally do not go for high risk, it s safe for them to invest in fixed return investments like bank, post office, LiC etc.
Of course it all depends on one's risk taking appetite and cushion threshold.

Take a look at Index funds as well

About IndiaStudyChannel.com

GENERAL

STUDY ABROAD

EDUCATION