After reading this post you will understand that getting rich is easier than you think.
In India when we are talking about getting rich we talk about investments in housing, gold, insurance, PPF but we hardly talk about Stock market. And there are two major reason for that. 1) That investing in stock market is very risky and 2) That the skill required and knowledge required to invest in stock market is too high.
I am going to realise you after reading this post that it is really impossible to loose money in stock market ( yaa you heard it right impossible to loose money in stock market) and the skill required and knowledge required for the same is nearly zero.
Interesting!!! Right let's get started....
So basically in India there are two major stock exchanges NSE (National Stock Exchange) & BSE (Bombay Stock Exchange). Now BSE has a very popular index known as SENSEX made up of top 30 companies of india decided on the basis of market capitalisation i.e on market value of company. So you calculate the market value of the company in India and then you rank them on market capitalisation. So the no 1 company these days is TCS followed by Reliance and list goes on. But the list does not remain same even the ranks changes and even the companies changes. But the SENSEX keeps on going up because the companies which are not doing well there waitage in the index keeps on going lower and they are replaced by relatively better performing companies.So SENSEX is basically a dynamic basket of top 30 companies of India which keeps on changing as the economy grows and the new leaders come in the picture.
Now similarly NSE has a very popular index know as NIFTY made of Top 50 companies of India again base on market capitalisation. Again when you compare the top 30 companies of SENSEX and that of NIFTY they are going to be same and the rest 20 companies in the NIFTY are relatively are very small. So they are not going to make huge impact on the index. So what I am trying to say that the movement of SENSEX and NIFTY is going to be same in both short term as well in the long term. So whenever I say SENSEX or NIFTY further it will be assumed as one and same.
Now, How a No-Nothing investor can invest in stock market and earn more than double the return a bank or PPF can give will be continued in the 2nd part.
Source: Varun malhotra
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