The WeekendInvesting Newsletter - 31 Jan 2024

In recent years, index investing has gained popularity due to its simplicity and potential for diversification. But is index investing foolproof? Are there any pitfalls that investors should be aware of? Let’s delve into these questions and explore the considerations surrounding index investing.

Index investing involves buying and holding a portfolio of stocks that mirror a specific stock market index, such as the S&P 500 or the Hangsang Index. Instead of trying to beat the market, index investors aim to match the returns of the overall market. This passive investment strategy gained popularity due to its low costs, broad market exposure, and simplicity.

While index investing has its advantages, it is crucial to understand that it is not foolproof. . . . .

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For the first five to six years, Alibaba traded in line with the industry ETF, demonstrating its position as a leading player in the industry and the Chinese market. However, certain developments within the company, such as the mysterious disappearance of Jack Ma in October 2020, marked the beginning of a downward spiral. From its peak at $300, Alibaba’s stock price has plummeted to around $67, experiencing a staggering decline of approximately 80%.

This decline is in stark contrast to the overall performance of the technology industry, which has seen a 349% increase over the same eight-year period. Despite being part of a growth-oriented industry, Alibaba’s stock has faltered due to undisclosed reasons, causing shareholders to bleed their investment. . . . .

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WeekendInvesting Daily Bytes

As we approach the end of January 2024, the Nifty seems to be relatively flat for the month. The consolidation and choppiness in the market have been evident, with sharp gaps occurring in the second half of the month. Despite the volatility, the market has remained resilient and made efforts to break out of resistance zones.

In terms of market performance, today’s session saw the market gaining almost. . .

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