Nifty 50 Gave 15% Return in the Last 3 Months, What Was Yours?

In this article, we will discuss:

• The Importance of Market Indices, Especially NIFTY 50
• Are NIFTY 50 Returns the Absolute Truth?
• Beyond P&L: The Real Measure of Stock Market Performance
• Real-Time Tracking: The Key to Informed Decision-Making
• Personal Index by Samco: A Game-Changing Tool
• Conclusion

As a stock trader you should be aware that success isn't simply defined by the market's overall performance. Instead, the ability of individual traders to generate returns higher than the key indices is, often, the ultimate objective. While the NIFTY 50 may boast a 15% return in the last three months, a question worth pondering is – What were your returns? Let us dive into the intricacies of measuring personal stock market performance, emphasising the significance of real-time tracking and providing invaluable tricks to enhance your returns instantly.

The Importance of Market Indices, Especially NIFTY 50

Before going any further, let us first reflect on the importance of market indices, particularly benchmarks like NIFTY 50, and why they play a pivotal role in the world of finance and investing. Understanding their importance is fundamental for traders and investors looking to navigate the complexities of the stock market. 

NIFTY 50 serves as a benchmark against which individual stock or portfolio performances are measured. It provides a baseline for evaluating how well an investment strategy is faring compared to the broader market. Since the index is composed of 50 of the largest and most liquid Indian stocks, its movements are often indicative of the overall health of the Indian economy. Investors often use market indices like NIFTY 50 to guide their asset allocation decisions.

Are NIFTY 50 Returns the Absolute Truth?

Now you may ask – if Nifty 50 is the eventual benchmark, then why do anything different? Simply mimic the index to earn the returns as per its market movements. There are different facets to consider here and we will delve into them through the course of this article.

As traders, our primary goal extends beyond merely participating in the market; it's about generating superior returns compared to the market index. Historical examples of legendary traders, such as Warren Buffett or Rakesh Junjhunwala, who consistently outperformed market indices, serve as inspiration. 

Moreover, even though the Nifty 50 may be on a high recently, the true performance of your portfolio is a derivative of your personal rate of return of your stock holdings. What good is a bull run to you if your portfolio is underperforming? Right?

Beyond P&L: The Real Measure of Stock Market Performance

While Profit and Loss (P&L) statements are conventional metrics, they fall short in encapsulating the holistic view of stock market success. Moreover, the standard methodology for calculating portfolio returns, usually, does not account for other factors such as broking cost, corporate actions, dividends, penalties, etc. The real measure lies in your Personal Rate of Return or Personal Index from the stock market and factoring in all the underlying elements. It is calculated by contrasting your rate of return with your chosen market index, thereby providing a more thorough understanding of your performance. 

This personal index serves as a compass, guiding you through the complex terrain of stock trading with precision and purpose. Measuring your personal index provides a personalised assessment of your performance, going beyond generic market indices. It allows you to gauge how well your unique investment strategy aligns with your financial goals and risk tolerance.

Regular measurement of your personal index reveals the strengths and weaknesses of your trading strategy. It serves as a diagnostic tool and allows you to make strategic decisions with confidence; helping you identify areas where you excel and aspects that may require adjustments or enhancements. 

Real-Time Tracking: The Key to Informed Decision-Making

To truly understand your individual performance and gauge your personal index, real-time tracking is vital, as it provides an immediate feedback mechanism for your trades. Instead of waiting for end-of-day reports, you can assess the impact of your decisions in real-time and quickly adjust your positions.

Stock markets are dynamic, with prices changing rapidly based on various factors such as news, economic indicators, or sudden market shifts. Real-time tracking empowers you to adapt to the fluctuations promptly. Identification, evaluation, and mitigation of risks is also timely and efficiently facilitated when you have a clear view of your portfolio and positions all the time, anytime.

Another crucial trick for being a successful trader is identifying the ideal entry and exit points. Real-time tracking helps you capitalise on a sudden drop in a specific stock, a broader market correction, or favourable market movements and execute trades with accuracy, maximising returns and minimising losses.

Apart from efficient active portfolio management for traders with a diverse portfolio, real-time tracking significantly benefits intraday traders, in particular. The ability to monitor price movements minute by minute allows for timely execution of intraday strategies, capturing short-term opportunities. 

Personal Index by Samco: A Game-Changing Tool

It must be evident by now why keeping a real-time track of your own portfolio and prevalent market conditions is vital for traders. It is equally critical to measure your personal returns and understand your personal index, in comparison to indices like Nifty 50. You may think – it’s easier than done. How can you manage so many tasks on your own? The time and effort involved may seem overwhelming. Don’t worry. There are two things that will help you ace the index. One – treating trading like a serious business, and, Two – Samco Trading App.

Samco's Personal Index introduces a paradigm shift in how you can gauge your performance. This innovative tool enables you to compare your returns with the market index of your choice, personalised to your trading preferences. 

Samco's Personal Index takes into account various financial assets in your portfolio such as the current cash balance, stock holdings, mutual fund holdings, derivative positions, and so on. By consolidating and tracking all the assets you get a true picture of your market performance. Not only can you, then, compare your track record with market indices, you can also compare it with other traders and investors on the Samco platform. But simply tracking performance isn’t where it ends. Personalised AI-based recommendations will give you the insights to areas of improvement and help your portfolio outperform the market.

Setting up and using the Personal Index feature on the Samco platform is a piece of cake. Here’s how:

• Step 1: Open an online demat account with Samco
• Step 2: Create a Personal Index and name it
• Step 3: Choose the indice you want to use as the benchmark to outperform
• Step 4: Enter  the percentage by which you want to beat it

And that’s it. You’re set in your journey to ace the index.

Thereafter, you can track your portfolio in real-time, know the stocks that are doing well or underperforming, and compare your performance against your chosen benchmark anytime, anywhere.

Conclusion

In conclusion, while the NIFTY 50's impressive 15% return serves as a solid benchmark, your ultimate goal should be to be able to generate better returns in comparison. Success in the stock market is a personal journey, defined not by market averages but by your ability to surpass them. Consistent measurement of your personal Index is integral to building long-term wealth. It ensures that your investment decisions are aligned with your financial objectives, fostering a sustainable approach that stands the test of time.

Embrace the power of your Personal Index by Samco, and witness a transformation in how you perceive and achieve success in the dynamic world of stock trading. 

Disclaimer: INVESTMENT IN SECURITIES MARKET ARE SUBJECT TO MARKET RISKS, READ ALL THE RELATED DOCUMENTS CAREFULLY BEFORE INVESTING. The asset classes and securities quoted in the film are exemplary and are not recommendatory. SAMCO Securities Limited (Formerly known as Samruddhi Stock Brokers Limited): BSE: 935 | NSE: 12135 | MSEI- 31600 | SEBI Reg. No.: INZ000002535 | AMFI Reg. No. 120121 | Depository Participant: CDSL: IN-DP-CDSL-443-2008 CIN No.: U67120MH2004PLC146183 | SAMCO Commodities Limited (Formerly known as Samruddhi Tradecom India Limited) | MCX- 55190 | SEBI Reg. No.: INZ000013932 Registered Address: Samco Securities Limited, 1004 - A, 10th Floor, Naman Midtown - A Wing, Senapati Bapat Marg, Prabhadevi, Mumbai - 400 013, Maharashtra, India. For any complaints Email - grievances@samco.in Research Analysts -SEBI Reg.No.-INHO0O0005847.