There are 5000 + companies listed on BSE and to choose a good company from so many companies for long term becomes very difficult as the future is always uncertain. There is always a risk associated that the share price of the company you choose to invest might become Zero or Negligible after certain period of time depending on various factors.
There have been companies which have drastically eroded the wealth of the share-holders. Further, according to a survey, only 3-4% business runs smoothly till the 3rd generation and then may start facing hiccups.
So where do we invest?
If you are not able to identify good stocks to invest for your goal of having a diversified portfolio of quality stocks for long term, here is a perfect strategy for the same.
The best instrument for investment is Index like Nifty or Sensex.
Nifty over the years:
| Year | Nifty |
| 2002 | 1100 |
| 2005 | 2837 |
| 2010 | 6135 |
| 2015 | 7946 |
| 2019 | 12168 |
Sensex over the years:
| Year | Sensex |
| 1979 | 100 |
| 1988 | 600 |
| 1998 | 3600 |
| 2008 | 21600 |
| 2019 | 40000 |
Sensex started its journey from 100 points in 1979 and in 2019 it was trading around 40000. The various pitfalls in this journey involves incidents like:
- Many Governments came and went
- Harshad Mehta Fraud
- Ketan Parekh Fraud
- Kargil War
- Bomb blast in BSE and Parliament
- Several terrorists attack
- Some bad political decisions
- Global recession
- Demonetisation
- COVID-19
Despite all these incidents, the Sensex has only made progress. But at the same period of time, many companies came and disappeared.
If we talk about Nifty, then in 2008, it dropped from 6100 to less than 3000. But today it has gone up to 12000.
Now the questions arises as
“How to invest in Nifty?”
“What to do when events like Covid-19 disrupts the market?”
“How to hedge risk under in case of events like Covid-19?”I surveyed and researched a lot on the web as well as through offline webinars to find the right strategy to consider these parameters and have interestingly come up with a unique strategy called “Long Term Index Strategy” from Finideas. As a part of the strategy, it involves dynamic returns by investing into Nifty, Benefits of Leverage through Futures and protection against market through hedging. Thus, the strategy involves
Step 1: Invest in Nifty Delivery + Nifty Futures + Debt Market
Step 2: Purchase protection of Investment
The returns over a period of 6-7 years may far exceed the returns if the investment is made into shares of individual Companies forming part of Nifty.
To Learn more about the strategy, the user may go through the You Tube Video or visit the FinIdeas WebPage here.
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