Changes in the index and effect of changes in index: Finance Trading Times

Changes in the index and effect of changes in index

Sensex has touched 20K, Nifty sailing at 6K.

Some are still not happy. The reason –as I heard from many colleagues – “The stocks that I bought are not rising. What should I do?”.

Here is a news item of yesterday – “Cairn to replace MTNL and Idea to replace HPCL in Nifty Index.”

Then, CNBC TV 18 further elaborated on the news item: NSE today announced that MTNL will be replaced by Cairn on Dec 12, hence the MTNL stock was down almost 6%.

This is what is called stock risk. The overall market is going up, touching new highs everyday. Yet, some of your stocks are not performing. Instead, they may be going down.

The investors in MTNL are the ones who are suffering. Considered a bluechip stock, and a part of Nifty index, today it is paying the price for non-performance.

That is the reason why Index based investing is the most efficient strategy, as explained in my article Simplest Investment Strategy and Index fund Investments .

Choice is yours!

Link to previous article How are the stock markets working?


Have questions, please read the comments and post your views and queries in the comments section which helps in open discussion and avoids duplicity of questions.

You may be interested in reading my previous articles. Here is the link to Table of Contents in a chronological order.
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5 Comments: Post your Comments

Amit said...(on 2 November 2007 at 02:00 )  

Hi Shobhit,
I am interested in doing MBA finance, however neither I have any knowledge of various branches in finance (PE, IB etc.) nor I know which international B-School are ranked for finance programs.

Kindly refer some websites/material which can give me some insight.

I am a technical guy working in multi-media domain for past 2.5 yrs.

Anonymous said...(on 4 November 2007 at 21:14 )  

I fully agree with what you say here, and what you've said earlier.

This whole stock market business is a bit of a scam. Not stocks per se, but the way those with a vested interest in stocks project "the Market" to gullible investors.

The fact is, trading (as in churning your portfolio day in and day out) does NOT bring value to the investor. It does bring value -- to the broker, who earns a percentage of every transaction; to the portfolio manager, who can pretend to be doing lots of work; and to financial analysts, who churn out report after report to feed this frenzy, in the process earning their bread and butter; but NOT the final investor.

I know it is discourteous to leave comments anonymously, Shobhit, but as one of the "gang", I'll choose discourtesy to running the risk of getting bumped off! Keep up the good work!

Anonymous said...(on 4 November 2007 at 21:17 )  

Hey, what happended to the comments format? Half (nay, three-fourths) of the fun of commenting is seeing what you say (and your name, if you choose to disclose it) up there on the screen, enjoying its three minutes of pseudo-fame.

Yeh kya anarthh ho raha hai, Shobhit? Bring back the comments! In their full glory, as earlier.

Andy K said...(on 6 November 2007 at 00:02 )  

Hi Shobhit
Very Happy Diwali & New year to you and all the readers of this wonderful blog. May market bring cheers & prosperity to everyone's life

regards
Aniruddha

Investment n Trading Advisor said...(on 13 November 2007 at 02:54 )  

Thanks Andy and all.


I am enjoyiong Diwali leaves and will be back in 2 days :)

Have a happy and prosperous diwali!

-Shobhit

Wish you all happy and fruitful trading and investing activities with safety! = = = Post a Comment

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