Special offer to invest in lower caps now !
Hi Investor,
Halfway through FY27, small caps are up 24.6%, mid caps 12.5% — while the Nifty 50 has managed just 1.3%. A gap this wide has happened only 6 times in 21 years, and 4 of the last 5 times, it marked the start of a big rally.
If you want in before this plays out further, we’ve opened a limited window on Mi 20.
🥇35% off — code MI20X — limited to 50 slots.
Only 23% Beat the Index
A surprising fact from the S&P 500 shows how hard it is to pick winning stocks. Over the past 10 years, only 23% of S&P 500 stocks beat the S&P 500 index.
This means most stocks failed to give better returns than the index itself. But the small group of winners made a very big difference.
Winners Made Huge Gains
The gap between winners and losers is massive. Over three years, the winning stocks gave more than 100% returns, while the losing stocks lost around 62%. Over 10 years, the average gain of the winners was around 600%, while the average loss among the losers was around 205%. This shows why finding the right stocks can have a huge impact on portfolio returns.
The Problem With Index Investing
Index investing can work well when the index is going up strongly. But the problem comes when the index itself is not able to perform well. This can happen when some of the biggest stocks in the index stop growing or start falling. Even if many smaller stocks are doing well, weak heavyweights can keep the whole index from moving higher.
India Could Face the Same Problem
The same idea is important for investors in India. If a large number of Nifty heavyweights are not performing, the Nifty may struggle even when other stocks are doing well. Simply holding the index means you continue to hold both the winners and the losers. You do not get to choose which stocks are creating most of the returns.
Find the Winners
This is why investors may need a clear strategy to identify the strongest stocks inside an index. Instead of blindly holding every stock in the index, the goal can be to find the winners and stay invested while they are winning. At the same time, weak stocks can be avoided or removed from the portfolio.
A Different Way to Build a Portfolio
The key lesson is not that index investing is always bad. The bigger point is that winners can make a huge difference to portfolio returns. A successful portfolio may need a system that finds strong stocks and lets go of weak ones. In markets where only a small group of stocks creates most of the gains, finding those winners can be much more important than simply owning the entire index.
