Should You Buy Nifty 50 at 17,400 for ‘Long Term’?
When talking about , most of the investing community only looks at a short-term view. Much of the credit could be given to a continuous increase in the Nifty 50 index options and futures volume, denoting investors’ inclination toward index trading. However, Nifty 50 can also be used as a long-term investment vehicle, especially for those who do not have the financial knack which is required to handpick strong companies for their portfolio.
I am not a huge fan of SIPs (systematic investment plans) but still consider it a better way than going for direct equity investments for novices. An SIP is simply a buying strategy wherein investors tend to buy the security at regular and fixed intervals of time, without getting bothered about the price. But now as Nifty 50 is down 7.8% from an all-time high, is it the right time to invest in it for the long term?
In my opinion, any meaningful dip in the frontline index of India (Niftt 50) is to be bought for the long term if one is bullish on India for the next decade, at least. The 17,350 – 17,400 is a great support level and as opposed to SIPs, I prefer to buy on a dip near strong support. Surely, SIPs work for the long term but buying the dips works even better.
Investing at the current levels (which is strong support) does not mean that the market could not fall further. In fact, if it does, it would be an even better opportunity to invest as who would want to miss a lower price for long-term investments? If the Nifty falls from here, the next level to watch out for the next tranche of investment is 17,000. Buying the dip this way would surely beat the SIP return in the long run.
Now, some of you might ask how to invest in Nifty 50 for the long term. The answer is simple – via ETFs (Exchange-Traded Funds). There are several Nifty 50 ETFs available which can be bought and are held in the demat account just as one would buy a share which is then kept in the demat account. Some of these ETFs are UTI Nifty 50 Index Fund, ICICI Prudential (LON:) Nifty 50 Index Fund, Navi Nifty 50 Index Fund etc.
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