CHART OF THE WEEK 📈
The Nifty 50 is down 8% so far in 2022, and that’s gotten everyone scared. However, that hardly reflects the state of the market. Usually angst is much more elevated as the Nifty 50 is just a compilation of the largest 50 companies – the best of the lot.
The smaller companies usually tend to suffer a lot more. And not a lot of people stick to just investing in the index, or in the constituents of the index. It’s natural that they are exposed to multiple other companies in the market.
Here’s how much more they have suffered. In the Nifty 500, 80% of the stocks are down since the beginning of the year. Only 20% of them are up. 50% of the stocks in Nifty 500 are down between 10-30%. So most portfolios and mutual funds would be down more than the broader index.
The state of portfolios is much worse than the markets – and that’s seen in this underbelly rather than just looking at the movement in the broader index.
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