The Nifty has become the barometer of unanimous choice for diverse stakeholders, including investors, analysts, business leaders and managers, market operators, advisors, policymakers, and watchdogs.
Against this heartening backdrop, it would be worthwhile to trace Nifty’s illustrious journey of 25 years for drawing a few actionable insights.
Reddy’s Labs, and Reliance were the top wealth growers, the subdued performers include Tata Motors, Hindalco, and Tata Steel.
It seems easy to conclude that had one invested in the top performing schemes or handpicked right stocks, one would have built a treasure in 25 years.
These conclusions are not unsubstantiated but indeed detached from reality.
The chosen 50 stocks are rated on factors like listing history, liquidity, free-float market capitalization, and trading frequency.
Over time, many manufacturing and legacy stocks have marked their exits, while tech and private banks have emerged as the dominant players.
Stock market indices, including the Nifty, help us understand where the market is placed and where it is likely headed.
Outside the purview of the index, some stocks from the broader market may rise to dizzying heights, while many laggards may stagnate or fall to record depths.
One should be wary of situations where the market is moved up or down by a small number of stocks.
Even amid the ongoing second wave, when India is still not yet out of the crisis, the Nifty is at a record high, while the BSE Sensex has breached the 52000-mark.
No wonder, many investors suffer huge losses in the lure of chasing penny stocks or blindly following tips.
Generally, long-term investment is rewarding if one bets on fundamentally sound stocks with resilient business models and professional managements.
The call may go right or wrong, but one has to be active and agile to the demands of shifting situations.
There are stocks that one could hold on to for decades, and there are many that should be discarded within a year’s time.
There are scores of schemes with glossy advertisements that showcase MFs as guaranteed treasure troves.
Stockbrokers, certified planners, and wealth managers help the small investor select the right stocks and mutual fund schemes in line with respective financial positions, risk appetites and investment goals.