Investment: Now is the right time

We need to start our investments as early as possible. Now is the right time to start the investments if we are earning.

We should create a diversified portfolio to minimize the risk involved in investing. We can invest in Fixed deposits, recurring deposits, gold, government bonds, mutual funds and stock or any combinations to create wealth.

Once we have created a portfolio, it will start generating incomes in the forms of interests, dividends and capital appreciation. The financial portfolio will reach to a stage of it being working hard for us to cover our monthly expenses too.  

Investment: Sector preference

If we want to build our portfolio on the basis of sector, we need to consider the total weightage of the stocks in a particular sector.

Banking and financial services lead in Nifty 50, followed by energy and IT sectors. After selecting the sectors, we can build our portfolio considering the weightage of stocks in the particular sector. As for example HDFC bank leads the banking sector.

Invest in Market leaders. Invest in top 1, 2 or 3 companies in a particular sector.

Bank nifty is available in ETF to invest, if we are not able to decide where to put our money in Banking sector.

Investors should plan their portfolio in such a way that they need not worry about the selected stocks as long as the stocks remain the market leaders. 

Investment: First stock selection

In NSE & BSE,  we have a long list of listed companies. Nifty 50 is top 50 companies and Sensex is top 30 companies.

50 companies in Nifty 50 and 30 companies in Sensex contribute to the respective index according to their weightage. The stock with the most weightage becomes the main reason behind the rise or fall in the index.

We must select our first stock considering the weightage  in the index. Selecting from the top 5 or 10 companies based on their weightage is the better strategy than investing in a weak stock.