Hello everyone welcome to your website. Earlier I have told you about Tata stock, Moderna stock, japnese yen,, Nike stock, cryptocurrency etc. If you want to know about them then definitely read the articles written by us on them. In this article we are going to tell about
“How to invest in sensex”. If you want to know more about sensex then stay with us in this article.
What is sensex ?
The words sensitivity and intex join and make sensex. so friends what is sensex? it is also called bse 30. this market index consists of the 30 well stabilized companies. which are financially sound, stable, and performing well in the market, which are also listed in the bombay stock exchange. these 30 companies which are the constituent of the sensex, make the sensex. it is important that we are invest money in quality stocks. stock is included in the sensex after proper due diligence. meaning not any the every stock can be included in the list of the 30 companies that make up the sensex. a company needs to fulfill 5 criteria to get listed in the sensex/bse30. now, you must be thinking what are those 5 criteria?
- The first criteria which is very obvious is that the company has to be listed in the bse, if the company is not listed in the base.
- Then it cannot be a part of the sensex.
- Second, it has to be large to midcap company.
- Third, the company must be liquid.
- Forth, company should be generating good bussiness revenue from its core business.
This is Introduction part of “How to invest in sensex”
How to invest in sensex ?
Suppose I decide to invest directly in stock depending on its weightage in the sensex, the biggest problem we will face here is if we are investing with less capital.
A. We cannot fraction of stock here, meaning if there is a stock we need to buy it completely. suppose I want to buy 1 stock of Reliance, whose current rate 2400, and wish to invest rs. 5000 in it. So, if i buy the rs. 2000 reliance stock. 40% of my invested amount will become 40% weightage of relaince, whereas its actual weightage is less that this. Also I cannot buy reliance stock in fraction, So i have completely. Managing for me if i start investing directly into stocks depending on their weightage.
B. Also friends the weightage of the stock changes almost on a daily basis, if the value of stock rises or fall its weightage changes. It will become practically impossible to directly invest into constituents of sensex according to thier weightage.
Now friends the next question that you must be having is, What options do we have? The alternative is option no. 2, where I will invest in index mutual funds. Here I can invest even a small amount. I can invest rs. 500 also. The fund manager present there will take care that the money. I am investing in proportion to the weightage of that particular stock in the sensex. Index mutual funds are professionally managed. So, any increase or decrease in the weightage of a stock or any other tracking will be done by the mutual fund manager, you need not worry about it.
C. Whatever re balancing is to be done in the mutual fund, the fund manager performance it very well.
Why Go for Index Funds ?
Why do i invest in index mutual funds? Like i said earlier you can invest even rs 500 in this.You do not have to worry whether the amount you are investing is in the proportion to the weightage of that particular stock. Your fund manager will do this for you. Friends you can invest mutual funds thorught SIP also. Also, the funds here are managed passively and not actively. we have already seen the list of the stocks and their weightage earlier in the video. so the fund manager will invest the amout in the proportion, He cannot make any changes to it from his side. He has to invest in only those stocks that are constituents of sensex, and in the same weightage that is the weightage of that particular stock. The fund manager as, i said earlier, will invest only in those stocks that are a part of the sensex and will invest according to the weightage that the particular index or in the sensex. We do not have to ve scared thinking what if the fund manager select the worng stock.
Here I would like to mention one other special thing related to mr. Warren buffet, Who is considered to be the world’s most successful investor. He also said that it is good to invest in index mutual funds. He once said that “index funds are the most sensible. Investment should not be done in just one sector, investment should also be done in different places like real estate etc. But after investing in share market, the chances of profit are very high.
So this is all about “How to invest in sensex” . If you like this article then please share with your friends and family thank you for visiting our website.
1. What is the current Sensex of India?
2. What is the base price of Sensex stock?
3. What is Sensex value?
If the Sensex value increases it means that there is a general increase in the prices of share
4. How is sensex calculated?
Sensex = (total free float market capitalisation/ base market capitalisation) * Base index value.
5. What is the full form of NSE?
NSE – National Stock Exchange of India Ltd.