Stock Market Investment for Beginners | Day - 6
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What does the term "Portfolio" mean in the context of Stock Market?
Portfolio - In simple terms collection of stocks is termed as Portfolio.
Let's say you bought shares of Tata Motors, Reliance Industries and Few more. Among them some stock can perform good i:e their price can rise while other stocks can perform poorly i:e their price can fall.
So as as an investor you have to manage the whole Portfolio (bucket having all stocks of yours). There is a special designation who manages other people's Portfolio known as Portfolio Manager.
What is actually Sensex & Nifty that we hear in financial world like Sensex is falling, Nifty has gone down etc.
Earlier we have seen that in IPO process public buys shares from company directly and if the public want to sell those shares to other public they can do it via stock market or share market or stock exchange e.g - NSE, BSE.
But we should remember that IPO process continues for few days only. Once the IPO process of a company is over then that company will be listed on stock exchange. Once company is listed on stock exchange general public can buy/sell the shares of this company via stock exchange.
For example on NSE around 2000 companies are listed and figure is around 5500 on BSE.
Now if you want to track the financial health of Indian economy then you need to track all those 5500 companies. Almost all of 2000 listed on NSE are common in 5500 of BSE.
Don't you think it's very complicated task to track the 5500 companies? To make this task easy Financial expertise picks few good companies from each sector and club together to represent the whole Indian economy.
For example Sensex is collection of 30 companies of BSE while Nifty-50 is 50 companies of NSE clubbed together.
Such collection is known as Stock Market Index or Stock Index.
There are many indexes available in Indian stock market. Nifty-100, Nifty -500, Nifty-Auto, Nifty-Pharma, Nifty-IT, Nifty -Bank etc.
For analogy you can think of 11 cricket players team represents the performance of Indian cricket. The person sitting in USA will see the strength of those 11 players as the strength of India in the direction of cricket play.
Similarly if you want to have an idea about how Pharma sector is performing in india you don't need to trace all the Pharma companies but Nifty-Pharma Index only.
As the players in the Indian cricket team keeps changing based on their performance, Index also changes by replacing the older with new one to represent the economy in best possible way.
Nifty - Nse's fIFTY.
Sensex - SENSitive indEX.
Note: The Nifty-50 index gives 39.47% weightage to financial services, 15.31% to Energy, 13.01% to IT, 12.38% to Consumer Goods, 6.11 to Automobile and nil to agricultural sector
List of 30 companies of BSE SENSEX as of DEC-2019.
Terms:
What does the term "Portfolio" mean in the context of Stock Market?
Portfolio - In simple terms collection of stocks is termed as Portfolio.
Let's say you bought shares of Tata Motors, Reliance Industries and Few more. Among them some stock can perform good i:e their price can rise while other stocks can perform poorly i:e their price can fall.
So as as an investor you have to manage the whole Portfolio (bucket having all stocks of yours). There is a special designation who manages other people's Portfolio known as Portfolio Manager.
What is actually Sensex & Nifty that we hear in financial world like Sensex is falling, Nifty has gone down etc.
Earlier we have seen that in IPO process public buys shares from company directly and if the public want to sell those shares to other public they can do it via stock market or share market or stock exchange e.g - NSE, BSE.
But we should remember that IPO process continues for few days only. Once the IPO process of a company is over then that company will be listed on stock exchange. Once company is listed on stock exchange general public can buy/sell the shares of this company via stock exchange.
For example on NSE around 2000 companies are listed and figure is around 5500 on BSE.
Now if you want to track the financial health of Indian economy then you need to track all those 5500 companies. Almost all of 2000 listed on NSE are common in 5500 of BSE.
Don't you think it's very complicated task to track the 5500 companies? To make this task easy Financial expertise picks few good companies from each sector and club together to represent the whole Indian economy.
For example Sensex is collection of 30 companies of BSE while Nifty-50 is 50 companies of NSE clubbed together.
Such collection is known as Stock Market Index or Stock Index.
There are many indexes available in Indian stock market. Nifty-100, Nifty -500, Nifty-Auto, Nifty-Pharma, Nifty-IT, Nifty -Bank etc.
For analogy you can think of 11 cricket players team represents the performance of Indian cricket. The person sitting in USA will see the strength of those 11 players as the strength of India in the direction of cricket play.
Similarly if you want to have an idea about how Pharma sector is performing in india you don't need to trace all the Pharma companies but Nifty-Pharma Index only.
As the players in the Indian cricket team keeps changing based on their performance, Index also changes by replacing the older with new one to represent the economy in best possible way.
Nifty - Nse's fIFTY.
Sensex - SENSitive indEX.
List of 50 companies of NIFTY-50 Index as of DEC-2019
| Company Name | Sector | |
|---|---|---|
| Adani Ports | Infrastructure | |
| Asian Paints Ltd | Consumer Goods | |
| Axis Bank | Banking | |
| Bajaj Auto | Automobile | |
| Bajaj Finance | Financial Services | |
| Bajaj Finserv | Financial Services | |
| Bharti Airtel | Telecommunication | |
| Bharti Infratel Ltd. | Telecommunication | |
| BPCL | Energy - Oil & Gas | |
| Britannia Industries | Consumer Goods | |
| Cipla | Pharmaceuticals | |
| Coal India | Energy & Mining | |
| Dr Reddy Lab | Pharmaceuticals | |
| Eicher Motors | Automobile | |
| GAIL | Energy - Oil & Gas | |
| Grasim Industries | Cement | |
| HCL Technologies | Information Technology | |
| HDFC | Financial Services | |
| HDFC Bank | Banking | |
| Hero MotoCorp | Automobile | |
| Hindalco Industries | Metals | |
| Hindustan Unilever | Consumer Goods | |
| ICICI Bank | Banking | |
| IndusInd Bank | Banking | |
| Infosys | Information Technology | |
| IOC | Energy - Oil & Gas | |
| ITC Limited | Consumer Goods | |
| JSW Steel | Metals | |
| Kotak Mahindra Bank | Banking | |
| Larsen & Toubro | Construction | |
| Mahindra & Mahindra | Automobile | |
| Maruti Suzuki | Automobile | |
| Nestle India Ltd | Food Processing | |
| NTPC Limited | Energy - Power | |
| ONGC | Energy - Oil & Gas | |
| PowerGrid Corporation of India | Energy - Power | |
| Reliance Industries | Energy - Oil & Gas | |
| State Bank of India | Banking | |
| Sun Pharmaceutical | Pharmaceuticals | |
| Tata Consultancy Services | Information Technology | |
| Tata Motors | Automobile | |
| Tata Steel | Metals | |
| Tech Mahindra | Information Technology | |
| Titan Company | Consumer Goods | |
| UltraTech Cement | Cement | |
| United Phosphorus Limited | Chemicals | |
| Vedanta | Metals | |
| Wipro | Information Technology | |
| Yes Bank | Banking | |
| Zee Entertainment Enterprises | Media & Entertainment |
List of 30 companies of BSE SENSEX as of DEC-2019.
| # | Companies | Sector | ||
|---|---|---|---|---|
| 1 | Asian Paints | Paints & Varnishes | ||
| 2 | Axis Bank | Banking | ||
| 3 | Bajaj Auto | Automotive | ||
| 4 | Bajaj Finance | Finance | ||
| 5 | Bharti Airtel | Telecommunications | ||
| 6 | HCL Technologies Ltd | Communication Services | ||
| 7 | HDFC Bank | Banking | ||
| 8 | Hero MotoCorp | Automotive | ||
| 9 | Hindustan Unilever | Personal Care | ||
| 10 | Housing Development Finance Corporation | Finance | ||
| 11 | ICICI Bank | Banking | ||
| 12 | IndusInd Bank | Banking | ||
| 13 | Infosys | Software | ||
| 14 | ITC | Cigarettes & FMCG | ||
| 15 | Kotak Mahindra Bank | Banking | ||
| 16 | Larsen & Toubro | Infrastructure | ||
| 17 | Mahindra & Mahindra | Automotive | ||
| 18 | Maruti Suzuki | Automotive | ||
| 19 | Nestle India Ltd | |||
| 20 | NTPC | Power | ||
| 21 | Oil and Natural Gas Corporation | Oil & Gas | ||
| 22 | Power Grid Corporation of India | Power | ||
| 23 | Reliance Industries | Conglomerate | ||
| 24 | State Bank of India | Banking | ||
| 25 | Sun Pharmaceutical | Pharmaceutical | ||
| 26 | Tata Consultancy Services | Software | ||
| 27 | Tata Steel | Steel | ||
| 28 | Tech Mahindra Ltd | Mining & Minerals | ||
| 29 | Titan Co Ltd | |||
| 30 | UltraTech Cement Ltd |
Terms:
Portfolio, Portfolio Manager.
Sensex.
Nifty.
Stock Market Index.
In context of Sensex Index , can you please elaborate more, as to how is it calculated, given the scenario that one company is at it's peak, while other is in bad phase. Is it the mean value ?
ReplyDeleteKeep up the good work.
--Manish
Hi Manish!
DeleteThanks for asking queries.
When any company performs bad consistently for long then that particular company can be removed and another good performing company can be added in stock index.
It's calculation is little bit of higher level that we can't discuss in the very first iteration as it is only introductory article.
Please stay tuned with us we will cover this too in next coming Iteration.
Impressive
ReplyDeleteThanks for feedback.
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