Do you know what is future trading? If no, then today I will tell you about what is Future trading? Actually, Future trading is one of the most interesting forms of trading in the stock market. The best part of it is that it can be implemented in many trading Read more…
Discount Cash Flow or DCF is one of the most popular ways to find the fair value of any stock. This method is simple and suitable even for stock marketing beginners who want to learn how to value a stock or how to do stock and equity valuation. We will Read more…
Hello friends, today again, I am brought you a new topic related to the stock market. Today we will know what is free Cash Flow? In this blog, we will understand the basics of free cash flow. In this blog, we will learn the easiest way how to calculate free Read more…
Do you want to know what are index funds? If yes, then you read this article completely. Today I will tell you what are index funds and how does it work? Today I will also compare between mutual fund vs index fund.
An index fund is an equity mutual fund that invests in stocks and consists of a number of stock indices, such as the BSE Sensex or NSE Nifty in India. As a result, an expert advice to investors for investing in index funds does not have to be taken.
The returns generated by them are closely related to the funds produced by the underlying index. The fund invests in the same proportion of securities of a particular index. These are aimed at popular indices such as the BSE Sensex or Nifty.
These funds may also be based on a particular sector, such as pharma, IT, FMCG or auto sector indices, etc. These funds are expected to yield returns similar to benchmark indices and their risks are also limited to the risks of those securities. Also associated in which they invest.
When the markets come down, the value of the securities included in it also falls and at the same time index funds also fall.
In your mind, these questions will surely be that which of the best of both mutual funds or index funds is good? You must have read many blogs or watched a lot of videos to get the answer to your question.
But the truth is that many people have told you that mutual funds are better, or many people have said that index funds are good. Instead of getting your answer, this will increase your confusion.
Mutual Fund Vs Index Fund
If you also want to know whether mutual funds are good or index funds, then this article will be very helpful for you.
Because today I will compare between mutual funds Vs index funds so that you can know by yourself which one is better. Today I will tell you the complete truth about mutual funds and index funds.
There has been a lot of discussion about index funds for the last one or two years. A few years ago, when Warren Buffett said that investing in index funds is very good. It is very safe for new investors. Since then, people are paying more attention to index funds.
Friends, we cannot blindly say that index funds are good or bad. It depends on the environment of different countries. If it is good in a country, it is bad in any country.
When Warren Buffett said that index funds are good, he said according to the US environment. Because there is a huge shortage of stock markets in the US or other European countries.
Most adults invest in the stock market. This is the reason why under-value stocks are not available there. Funds managers also find it very difficult to beat stocks.
That is why it is better to invest in index funds and the index will continue to give you as much return as the Sensex in India. So which kind of fund to choose, it depends on their economic climate or it depends on the environment.
Related Article: What Are Blue Chip Stocks | Is It Safe To Invest In Blue Chip Stock
Thus in a country with such a slow-growth economy, therefore the possibility the growth of the company is less. So that’s why it is very difficult to find companies with a high growth rate in the USA and even if found, they are not very profitable. But in India, it is easier to find outperforming company or future multi-bagger company than the USA.
If you invest in index funds, then you will not get exposure like a multi-cap company. Because that index fund will mimic a particular index.
So if you invested in small-cap index funds, you will get a return just as the small-cap company will perform. But if you take multi-cap funds in mutual funds, then you get an allotment of different types and the fund manager decides which asset to invest in. That is why I like mutual funds more because they give exposure to the entire market.
Most mutual funds do not outperform index funds. In this, sometimes the fund managers do such bad stock picking, their returns come less than a normal index fund.
One good thing about index funds is that the expense ratio is much lower than mutual funds. While the expense ratio of a mutual fund is 0.1℅, the expense ratio in a mutual fund is up to 1℅. If you save this extra fee, then you will get an extra return of 1 percent.
People of developed countries choose index funds because they have a lot of difficulty in getting 1% return. But India’s market has been growing at a rate of 15% for the last 30-35 years, so you should try to make sure that we choose a good fund manager by paying an additional 1% fee.
Now you know why people prefer index funds more? America or other European countries have developed and it has not as fast growers India. If we are investing in any mutual funds, then we hope that it will give us more returns than index funds. But there is a lot of business competition in the US and it is very difficult for each businessman to get ahead of each other.
Best index funds to invest in 2020
1. LIC MF Index Fund
2. ICICI Prudential Nifty Index Fund
3. HDFC Index Fund- Nifty 50 Plan
4. SBI Nifty Index Fund
5. UTI Nifty Index Fund (more…)
a falling stock can also make a profit. Short selling strategy can make good profits from your falling stock. So today we will know everything about short selling.
Blue chip stocks are stocks in which there is very little chance of loss. People believe in blue-chip stock so much that they put money without thinking.
Friends, if you want to invest in the stock market, then you need to know what are blue chip stocks and where does the use of this term? You need to know why this term is used, what is the reason for behind it?
You should read it: What are mutual funds | mutual funds Vs Index Fund
what are blue chip stocks?
Friends, the word blue chip is actually derived from the Poker game. Among the chips in that company, the colour of the high-value chip is blue.
Similarly, whatever stocks are of high value, the stock of which the chance of falling value is very low, then that quality stock is called blue-chip stock.
Blue-chip stocks are stocks that give all the companies in their sector to be the right direction. These stocks are the leaders of their sector. In the same direction in which blue chip stocks go, other companies of that sector also go in that direction.
You should read it: What is Bitcoin and how does it work?
These stocks have some special character or some special conditions so that we can call them blue chip stocks. Only seeing the good performance of this stock of last year, it would be wrong to call it blue chip stock.
Many people misuse this word in this market. If any stock is doing a good performance for the last few years, then it is blue chip stocks for them. But it is wrong.
Friends, no matter how much we see ads on TV, but there is always fear in mind that would it be right to invest money in mutual funds? This is so because many of us do not know what is mutual fund and how it works? People are fearful that Read more…
Nowadays when we Cattlenline payment through any digital wallet app or UPI, you must often have got cashback. Have you ever thought that cashback came from where? The government did not print that money, nor did RBI print it. So did this app print out that money from the Read more…
Before buying a stock of a company, we try to know everything about it to be it chart, prices movement or history of the company, we want to know a lot about that company. But despite seeing so much, after a few years, the stock of that company starts falling Read more…