Hello All,
If you’ve been an investor for over 7 years and have achieved a CAGR of more than 25%, I’d love to hear about your investment strategy. How do you choose stocks, how long do you hold them, how do you book profits, how do you handle losses, and when do you decide to exit?
Could you please share your journey, key learnings, and the tools you use for research? Any insights or tips that have helped you reach this level would be greatly appreciated.
I’m specifically asking for a minimum of 7+ years of experience because such an investor would have faced multiple challenges, including the impact of demonetization, the IL&FS crisis in 2018, and COVID-19 in 2020. You would have likely developed the mental resilience to navigate market volatility through these events.
Why 25% and more? Multiplying your portfolio every 3 years is an incredible achievement!
My Background:
I don’t qualify for the 25% CAGR Party, but I’m sharing my journey here so you can understand what I’m aiming for.
I have been seriously investing in the stock market for the past 7 years (since 2017). Before that, I was investing, but not significantly.
Here are my XIRR returns:
- 1 year: 24.5%
- 3 years: 14.4%
- 5 years: 36.8%
- 7 years: 21%
Over the years, my portfolio has faced several challenges, including the NBFC crisis, demonetization, and COVID-19. Despite these, it has consistently bounced back. After experiencing a 38% drawdown during COVID-19, I started allocating some funds to the PPFAS Flexi Cap Fund to delegate risk management to fund managers.
Looking back, I realize I made one significant mistake: not reallocating funds from my 2021 winners to other stocks. I held on to some of my past winners (Deepak Nitrite, Deepak Fertilisers, Laurus Labs, etc.) and missed the opportunity to invest adequately in emerging sectors like solar, defense, and PSUs over the past 2–3 years. Consequently, my portfolio hasn’t fully captured the growth from these sectors.
Now that I’ve identified this gap, I find it challenging to spot opportunities with good valuations. However, I have set a goal to achieve a 25% XIRR over time. To achieve this, I want to learn from others about sector rotation, growth investing, and momentum investing strategies.
I used to follow a strategy of investing in decent P/E stocks where new capacity was expected to come online within the next few quarters or in businesses suffering due to industry headwinds but expected to recover in the near future. I would then hold these investments silently for 2–3 years without making changes. I never chased any stock with a P/E above 40(exception for tracking positions). However, this approach doesn’t seem to be great for me if i want to reach 25% CAGR and above.
Thank you!