May 31, 2023

Are the Nifty and the Sensex the true barometer of the Indian stock exchanges? Then how do you reconcile the fact that while the two indices broke fresh ground and registered new highs on Monday, the 16th of October 2017, the breath of the market was negative as more shares declined than rose? The NSE reported 813 advances and 920 declines while the BSE reported 1279 advances against 1420 declines on the day. Hence, an investor would be foxed if he buys some stock after careful research only to find that the price fell despite the Nifty and the Sensex riding high.

Investing in stock markets is becoming trickier by the day. A part-time player is more likely to lose money than make the promised big bucks if he dabbles half-heartedly in stocks. The main reason is that the stock markets are now, more than ever, being driven by a handful of players playing around with the stocks of a handful of companies. Even IPOs are becoming highly overpriced where companies are trying to squeeze out the maximum premium. Rumours and loaded tips rule the roost and gullible investors are burning their fingers.

The best option for investors is to either invest in blue chip companies on a long term basis or go for mutual funds that have a proven track record. That way, they will encounter less risk. If they wish to get into the action themselves, they would be well advised to start small by building a portfolio over a period of time. If one wishes to get rick quickly, the stock market is not an option. The best way to start is to first ignore all unsolicited tips and find good companies or mutual funds to invest in by spending some time researching and learning about track records of companies. Day trading is an absolute no-no for the uninitiated. Do not let the banner headlines of Nifty and Sensex hitting fresh highs get to your head. You are more likely to lose money if you rush into investing now.