By Irshad Mushtaq
The stock market can be confusing, with ups and downs that seem daunting. Let’s break down what’s been happening with the Nifty, a popular stock index.
Recent Trends
1. Highs and Lows
26th September 2014:Nifty hit an all-time high of 26,216 points.
21st November 2024: It dropped to 23,349 points, a fall of about 2,967 points or 11.37% from the high.
25th November 2024: It rose again to 24,221 points, recovering 872 points from its recent low.
2. Current Status: Nifty is now 1,995 points below its all-time high, which is about 7.60% down.
Portfolio Strategy
Benchmarking: When the Nifty drops, ideally, your investment portfolio should follow a similar trend, within reason. If your portfolio falls less than the Nifty, your strategy is strong. If it falls more, you might need to reassess.
Quality Investments: Focus on maintaining a high-quality portfolio with proper asset allocation across various sectors.
Market Philosophy
Volatility as Opportunity: Market fluctuations are normal. When prices drop, it’s a good time to invest more in quality stocks or assets like ETFs (Exchange Traded Funds), quality shares and Mutual Funds.
Target Returns: Aim for a double-digit gain of 12% to 20% -22% annually. (CAGR)Over time, compound interest can significantly benefit your investments.
Key Qualities and Support
Patience & Knowledge: Successful investing requires patience and continuous learning.
Expert Guidance: Trusted advisory services can help you make informed decisions, ensuring you handle the market’s ups and downs wisely. Here’s a simplified estimation of a ₹10 lakh investment after 20 years at different interest rates, focusing on how many times it multiplies:
1. 12% Annual Return: Grows approximately 10 times.
Maturity = ₹1 crore.
2. 15% Annual Return: Grows approximately 16 times. Maturity = ₹1.6 crore.
3. 20% Annual Return: Grows approximately 38 times. Maturity = ₹3.8 crore.
4. 22% Annual Return: Grows approximately 51 times. Maturity = ₹5.1 crore.
These are rough estimates to give you an idea of the growth. In summary, understand that the market will always fluctuate. Use trusted advice and invest in quality to navigate these changes successfully.
- Learn from the insights of @Irshad Mushtaq, Writer, Investor, Entrepreneur & Founder of M I Securities! Connect for valuable financial advice at [email protected]
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