WHAT IS THE SIGNIFICANCE OF SENSEX FOR INVESTORS?

Want to know the performance of different stocks in different sectors of the economy? No problem. SENSEX, one of the stock market indices is there with the help of which an investor can observe the development and growth of different industries to know the value of different stocks in the Indian economy. Read this article to know some more benefits of using Sensex.

• Guiding to pick the right stocks: In a share market there are thousands of listed companies and it seems like a nightmare to pick the right stocks to invest in from this large number. If you do not have any benchmark then it will become nearly impossible for you to differentiate between two or more stocks and thus, it becomes challenging to sort these stocks. It is when SENSEX comes into the picture. SENSEX acts as a stock market index that provides you the benchmark so that you can differentiate the stocks. The shares of the companies are classified based on the size of the company, type of industry, financial impact, etc.
• Eliminate the gap between beginners and experts: Investing in equities can be risky especially for the investors who are fresher in this field and are not acquainted with enough knowledge. Several courses depart the knowledge about the stock market but it can be an impractical choice for beginners as this process is time-consuming. It is when the need for SENSEX arises as it helps to bridge the knowledge gap between beginners and experts. SENSEX is one of the stock market indices that represent the trend of specific sectors of the stock market or whole stock market.
• Reflecting investor's sentiments: When you desire to participate in the stock market then it becomes vital to know the sentiments of the investors as it is one of the factors that affect the demand of the stocks which further impacts the overall price of the stocks. With the help of SENSEX, you can figure out the mood of investors. For better investment, it is essential to know the reason behind the increase and decrease in stock prices. As a stock market index, SENSEX has to summarize the sentiments of regular investors trading in the market. 
• Aids in passive investment: Passive investment takes place when investors invest in the portfolio securities which replicate the stocks in a top-performing index. The passive investments are quicker, the cost of research is less and, also multiple stocks can be purchased in a single click. The returns on the replica portfolio should resemble that of the stock market index such as SENSEX. For example, if the portfolio of the investor resembles that of SENSEX, then the return on the portfolio will be 6% when SENSEX earns a rate of 6%.

SENSEX plays a major role when buying and selling stocks on the Bombay Stock Exchange while using your trading account. If you are looking for what SENSEX is and how it can benefit the investors then 5paisa is the best platform to visit. It also allows the users to trade in the stock market without any complications.