Election Result And Market Sentiments

Today we witness 400 points swing in Nifty during election result time. It was a traders day. Some must have lost and some must have gained which is always the case.

Nifty 10400 Option opened around 70 and hit low 23 and bounced to 105...
What a swing...one lot...around 4000 profit ( I am not calculating point to point as it is difficult to exactly buy on low and sell on high)buy 10 lot, 40K in an hour...it was indeed traders day.

Yes, it needs lot of patience, study and nerves of steel to see your option going from 70 to 23 and still wait and watch... and finally reap the fruits at 100+

This election result showed us lot of unexpected things...
Result was not one sided as claimed...
Majority was not given to single party y people.
This will now set the course for 2019 elections which all are eyeing for.

Why Investment In Mutual Fund Is Relatively Safe Than Investing in Direct Equity

If you are an EXPERT in picking stocks then you will get more returns than mutual funds. But if you are not then this is for you.

A mutual fund is both an investment and an actual company. This may seem strange, but it is actually no different than how a share of Infy is a representation of Infosys. When an investor buys Infosys stock, he is buying part ownership of the company and its assets. Similarly, a mutual fund investor is buying part ownership of the mutual fund company and its assets. The difference is Infosys is in the business of making software and taking projecs, while a mutual fund company is in the business of making investments.

Mutual funds pool money from the investing public and use that money to buy other securities, usually stocks and bonds. The value of the mutual fund company depends on the performance of the securities it decides to buy. So when you buy a share of a mutual fund, you are actually buying the performance of its portfolio.

The average mutual fund holds hundreds of different securities, which means mutual fund shareholders gain important diversification at a very low price. Consider an investor who just buys TCS stock before the company has a bad quarter. He stands to lose a great deal of value because all his rupees are tied to one company. On the other hand, a different investor may buy shares of a mutual fund that happens to own some TCS stock. When TCS has a bad quarter, it only loses a fraction as much because may be TCS is just a small part of the fund's portfolio.