Should We Invest In Index Funds In India
You Might Have Heard The Name Of Index Funds If You Are An Beginner Investor Too. In This Post I Would Be Clearing All Your Doubts That What Are Index Funds. Before Reading This Post I Recommend To Read My Earlier Posts About Sensex And Nifty Which Would Help You Understand Better About This Topic. Index Funds In a Simple Language Are a Group or Basket Of Many Stocks Or Bonds In Which We Can Invest Indirectly By Buying Index Funds Plans. Index Funds Are Usually Made For The Investors Who Does Not Want To Select Stocks Or Bonds By Themselves Due To Lack Of Knowledge Or For Minimizing The Risk They Want To Select a Whole Group Of Stocks According To The Sectors They Belong Or According To The Size Of Companies. By Buying An Index Fund Plan They Can Invest In a Big Group Of Stocks And If They Are Confident That The Group Would Be Performing Better In Future And The Sector Which They Belong Will Grow They Can Invest In These Group Of Companies And His Time Would Be Saved As He Does'nt Have To Analyze All The Stocks By Himself As When The Particular Sector Will Grow They Can Earn a Large Amount Of Money By Investing In Index Funds. Index Funds Are Also Known As Passive Mutual Funds Because When We Give The Money To Mutual Fund Manager He Does'nt Research And Analyze The Stocks By Himself He Collects a Large Amount Of Money From People Like You And He Goes And Invest In All Your Money In The Group Of Stocks You Want To Invest In. For Example You Want To Invest In Group Of Top 50 Companies Listed In National Stock Exchange You Will Simply Buy An Nifty 50 Index Fund As Group Of Top 50 Companies Listed On NSE Is Called Nifty 50. You Can Be Confident By Investing In These Companies As Our Economy Of Country Grows And The Production Of Top Companies Grows In India The Index Fund Would Also Grows As Our Country Is Also Growing and There Would Be No Worries If 2-3 or 4-5 Companies Remain At Losses Because The Remaining Companies Can Easily Recover The Losses As There Are 50 Companies In Nifty 50 And If Company Degrows And Get Out Of Nifty 50 Your Money Will Be Invested In New Comapny Entering In The Group. The Weightage Of Portfolio That How Much Money Should Be Invested In Particular Company Is Also Decided From The Size Of The Companies. So As Conclusion, Index Funds Are Best Investment For Those Who Want To Invest Regularly Small Amount Of Money And Does Not Want To Choose Companies By Themselves And Prevent The Risk Of Loosing Their Money So If You Come Under This Category I Also Can Invest Money In Index Funds.
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