Indian शेयर बाज़ार में विदेशी पैसा 🌍💲

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Does copying FIIs make any sense?

Why are we so obsessed with FIIs?

It is true, that with financial muscle power at their command, they have a large say in determining the direction of the market. But the recent pull out by FIIs(CDSL data) and how DII and retail saved the day, shows that FIIs aren't the only Hercules of the Indian stock market.

But we shouldn't be just concerned about the effect of FIIs on the overall market. Retail investors are rather interested in following their trend when picking stocks. So the question is, do FIIs have an influence on individual stocks?

Experts day, Take tips from FIIs by all means but understand the reason behind their action before you invest.

Investors must understand the opportunity cost is very different for FIIs and their action in buying or selling might not be only guided by the inherent performance of the stock or company but because FIIs need liquidity.

Another important point to note is that, many FIIs especially US based, invest in Indian equities as US treasury & bonds offer returns around 2-4%.

Also the type of FIIs will determine its objective, for example a long term investment fund FII is going to stay for 10-20 years regardless of how the market behaves, while big Hedge funds and even ETFs can get in and out within 2-3 months. So FIIs selling signal too needs to be analyzed.

Therefore, no one should never blindly copy the trend of FIIs in individual stocks or overall market.

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