If you’re just dipping your toes into the stock market, the world of investing can be intimidating. But one of the easiest and most reliable ways to do this is to review the NIFTY 50 index, which indicates the top 50 companies on the National Stock Exchange (NSE) of India and offers an overall look at the economic health of the country. This blog post intends to clarify what the NIFTY 50 is all about and how it is an ideal option for beginners to enter into trading.
At the end, we will also mention the Marketbhai trading app, a suitable option to help you on your trading journey.
What Is the NIFTY 50?
The NIFTY 50 is a market index that represents the 50 biggest and most liquid stocks on the NSE. Those 50 companies represent many sectors such as banking, IT, healthcare, consumables, and others. By investing in an index like the NIFTY, you will be investing in the largest sectors of the economy in India.
The NIFTY is good for investors because it offers diversification. Instead of picking individual stocks, you are indirectly investing in the performance of the entire economy; this is particularly suitable for beginners who have just started their investing journey and might not want to pick individual stocks.
The NIFTY 50 index was launched in 1996, and the NIFTY index serves as a good benchmark for the Indian stock market. The performance is a good indicator of the direction of the market, so by learning how the NIFTY works, you will get a sense of how well the market is doing.
Why Should Beginners Focus on the NIFTY 50?
The NIFTY 50 has several advantages for investors just starting. Most importantly, investing in the NIFTY 50 is a low-risk exposure to the stock market. The NIFTY 50 represents the biggest and most stable companies in India, lessening the risk that might be associated with smaller companies.
By investing in a broad and stable index like the NIFTY 50, investors can avoid single-stock volatility. Like any broad index fund, the NIFTY 50 allows a diverse range of exposure by representing many industries. The NIFTY 50 may be a good starting point for investors wanting to get exposure to stocks without risking their funds too much with smaller companies.
How Can Beginners Invest in the NIFTY 50?
As a beginner, getting started in the NIFTY50 may seem daunting, but there are many ways of investing in the index that will not require extensive knowledge about individual stocks.
Exchange Traded Funds (ETFs)
Investing through an ETF is one of the easiest ways to invest in the NIFTY 50. They track the NIFTY 50 performance to allow investments in all 50 companies at a single go. The advantage of an ETF is that they are listed on the stock exchange and can be traded similarly to a priced stock.
Some examples of NIFTY 50 ETFs are:
- Nippon India ETF Nifty 50
- ICICI Prudential Nifty Next 50 ETF
These funds provide you with the opportunity to conveniently invest in the NIFTY 50 and can be bought using most brokerage platforms.
Mutual Funds
Another option is NIFTY 50 Index Funds, or mutual funds. It is almost like ETFs; worth noting is wrapped and has a fund manager to actively manage your money. Index funds are suitable for beginners who do not want to be actively involved in their investment.
You can invest using a Systematic Investment Plan (SIP) allows you to invest on a very small scale regularly, helping people who do not track the market.
How to Track NIFTY 50?
For those just starting in the stock market, tracking the NIFTY 50 is a good way of staying educated about the movements of the market. There are a lot of platforms and tools to check the NIFTY 50 performance in real time. Some common examples are:
NSE Website
The NSE India website has lots of information about the NIFTY 50 index. It has live prices, historical data, and much more. Logging into the NSE website is the best source of information for those who want to keep track of NIFTY 50 performance.
Stock Market Apps
Many stock market apps provide live updates about the NIFTY 50 index. Use platforms like Zerodha, Groww, or Upstox to track NIFTY 50 in real-time. They are beginner-friendly and provide great detail around trends in the market. So, if you are a beginner trader, this is probably the best information platform for you!
Key Factors That Influence NIFTY 50
For every beginner investor, knowing what can possibly move the NIFTY 50 is an important step to understanding. There are various factors that can impact the performance of the index. These include:
Economic Factors
The NIFTY 50 represents the state of the Indian economy. If the Indian economy is growing, then consumer expenditure and profits of corporate companies are also growing, which has a favourable effect on the stocks forming the index.
Global Indices
As most of the companies on the NIFTY 50 are multinational corporations, their performance can be affected by the global economy. Global economic uncertainty, oil prices, international trading laws, etc, can impact the NIFTY 50.
Monetary Policy
Monetary policy set by the Reserve Bank of India (RBI) is a significant factor in the performance of the stock market. If the RBI reduces interest rates, then it can increase the stock market performance as the cost of borrowing is cheaper for businesses.
Marketbhai Trading App: A Beginner’s Trading Platform
When you begin your trading career, you need the right tools. A good trading platform can create a tremendous difference in terms of your experience and results. For newer traders interested in trading, platforms like the Marketbhai trading app offer an easy-to-use interface with robust features and insights that can help even beginners trade better.
Why Marketbhai?
Zero Brokerage: Marketbhai trading platform provides zero brokerage on trading, which can save beginner traders a considerable amount on every trade
Advanced Tools: The platform supports smart trading tools to help beginners track stocks and manage their portfolio.
Low Initial Investment: You can start your trading journey with Marketbhai by simply making a low minimum initial deposit.
The NIFTY 50 and Long-Term Growth
When buying into the NIFTY 50, a beginner should think long-term. Short-term potential gains can be tempting, too. But it is important to keep in mind that the stock market generally rises over the long run. In the long run, the NIFTY 50 index has and can offer very appealing returns. For this reason, long-term investors can find value in investing in the NIFTY 50.
In fact, investing in the NIFTY 50 through ETFs (Exchange Traded Fund) or index funds is often considered one of the easier and smarter styles of wealth compounding and long-term growth without having to spend too much time analysing and timing the market.
To sum up, the NIFTY 50 is a great starting point for those new to trading. By investing in this diversified index through ETFs or index funds, new investors can gain exposure to the Indian economy while enjoying a lower risk profile. Another component of getting started is to look for a trading platform that is beginner-friendly. If you are looking for a beginner seamless way to get started, make use of the Marketbhai trading app for the simplest and efficient way to get started in your trading journey with smart tools and no brokerage.
