Is the market down today?

How many of you have come across these questions or have asked the same?

How is market today?

Is market down(or up) today?

This is the most common question I have been asked by my friends and acquaintances. Actually they refer mostly SENSEX(sometimes NIFTY) and consider market is up or down depending on the index is up or down. Please don't embarrass your self by asking like this. If you really want to ask, the right question might be "Is SENSEX or NIFTY down today?"

In no way SENSEX or NIFTY represent the whole stock market and its not going to affect in anyway unless (read till end to understand).

SENSEX consists of 30 shares in BSE and NIFTY consists of 50 shares in NSE. Actually there are  thousands of shares listed in the respective stock exchanges. The index is created with certain weight for each share with the intent of representing the market. Their price movement every second during the trading hours determines the index price. But actually it represents a very few number of stocks. So SENSEX or NIFTY up or down only represents the  30 or 50 share movement. Even though it should represent market, it actually not. In no way you can say If the index is down, market is down and its all negative.

You or your  investment will be affected only If you have invested in any of the index shares. So If you have not invested in them, then you don't have to worry. Non of your investment decision should depend on the index level. The actual gems are not in the index, those in index, are already in everyone's notice. So most likely they are priced as per their value. So see beyond the index for investment decisions and stop asking that stupid question.

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