The returns of the portfolio came down to 6.9% in this ongoing fall. The problem that I’m facing is that left with no money to invest when there’s a big fall like this. Have to wait till the next payday!. Maybe that’s the price one has to pay for remaining invested all the time in equities.
So thinking seriously about SIPping a small amount (5% of my monthly investible ammount) in a debt fund on a monthly basis with a thought of using the corpus to invest in stocks only with a fall in NIFTY of > 10%. It will be a great help if anyone who’s doing it could throw some light on your experience.
I have a diversified portfolio too, but not as big as your’s. I have invested in a few stocks purely looking at numbers, did not do any kind of research. So, as I had gained a year of experience, when the markets are down, I started selling off these un-researched stocks and started investing in the stocks I have conviction in, I think I am doing the correct thing. You may consider it.
Thanks @chaitanyaC for the response. Yes I too did that to a certain extent.
Update on the portfolio:
The overall return is 4.5%. byke hospitality has fallen so much that it’s investment has become negligible. Many others have fallen, but luckily till now didn’t have any corporate issues or scams.
As the majority of the investment was done in the last three years and mostly from mid cap it took a toll on the return. (In addition to the monthly investment, had been adding stocks). Understood the hard way the need to have some giant cap and large cap for portfolio for stability.
Started a SIP in the following stocks in the last eight months in addition to the existing portfolio.
- TCS
- HDFC bank
- Asian paints
- Britannia
- Pidilite
- Nestle
- P and G
- L and T
All of the above names were always in my watchlist since 2012 when I started stock investing but everytime they looked expensive. So adding them monthly without any emotions attached.
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Hello everyone
Its a long time since I updated. Have been continuing with my old strategy of monthly SIP.
And its 12 years since I started equity investing this way. Some of the learnings I would like to share.
One thing that I always was intrigued was to know how compounding works in case of equity investing. The rise in the market thrilled me and the fall made me nervous. I had bookish knowledge to small degree but the doubts were always there. If I keep investing in stocks the way I did, (Method which I explained in the previous posts) will it really help to achieve a decent return? This question always was there at the back of the mind. More important question was really does compounding work the way its been glorified in stock market investing?
Afterall with a FD it is a more straight forward affair. At the end of every year the interest keeps on adding to the principal. Its only of late that I have begun to understand the beauty of compounding in equity investing.
In the early years of investing, say after 4 to 5 years the rise in returns is fast and fall is faster. Infact after 8 years of investing, during covid, my return almost became zero. Since then the bull run has helped to get a return of around 19%.
The last one month has been heavy on the portfolio. and the returns which was 19.5% last month has come down to 18.5%. No doubt in absolute terms I did have a big notional loss, But the percentage point reduction is less.
This I think is the power of being in the market for a long term.
Five years ago a similar fall would have bought down the returns by 5 to 6 percentage points.
I am writing this only with one purpose, may be some young investors out there who may be experiencing the volatility and concerned about the returns, we need to understand with time in the market the returns become more consistent and less volatile.
This journey is not without challenges. So many obstacles will come. But the important thing is don’t stop the monthly investment.
As the celebrated investor and the founder of Vanguard group John Bogle says, “Stay The Course” and we should do well!
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