Index Fund Investing in India
I have already discussed Index Funds in my previous post
How to become Rich through Index Investing
As discussed in the previous post mentioned above, we learned India Sensex returns in the past have been whopping +928%. But, past performance cannot assure future performance. So, what can ensure us for a higher return in future - market performance over risk-free returns?
1. Value-based Asset Allocation - Every investment decision must be taken with due care on price and value. I want you to understand what Warren Buffett has to say on Price vs Value and then check out below example.
"Price is what you pay. Value is what you get." - Warren Buffett
Just imagine, you want to buy the latest phone from below top-selling phones in India
Which one will you choose and why? - Drop your answer in the comment below.
Your answer will help you check your knowledge on Price vs Value?
2. Market Mood Index - The MMI is an investor sentiment tool that describes the current mood of the market. They have embedded an official Youtube explaining Market Mood Index.
- A high extreme greed value (>80) suggests investors should be cautious in opening fresh positions as markets are overbought & likely to reverse
- A high extreme fear value (<20) suggests a good time to open fresh positions as markets are likely to be oversold and might turn upwards
“Be fearful when others are greedy & greedy when others are fearful” - Warren Buffett
Now use these two tools for your perfect portfolio keeping below words in mind.
Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years - Warren Buffett
If you like this post, share it with your friends and family.
0 Comments