I have been following VP forum as a silent spectator for the last few months and find it quite useful and this is my first attempt at posting something. I have been following the markets since 2017 when I dabbled in the markets as a quick way to riches. As expected, it was a nightmare and I paid my fees by facing colossal losses buying stocks on Twitter tips at the peak of the bull run and then selling when the bears attacked thereafter. Since I had bought on tips, I had no conviction in them and simply followed what some ‘experts’ of the bull market on Twitter had been suggesting but no one guided what to do thereafter and I panicked when the markets crashed during 2017-2018.
Henceforth, I came across a well known person on Twitter who is a proponent of keeping things simple and only investing for the long term and reminding people like me who are not so good at finding the ‘multi-baggers’ and that changed my approach drastically. But yes they truly say investing is more about patience and conviction and you can’t borrow them.
So even though I kept buying consistent compounder type stocks in 2018 and 2019, I also made frequent buy and sell decisions switching companies based on the news trends and my short term gains. However by 2019 end I had sorted that the companies which I would keep in my ‘long-term portfolio’ and was fully invested but then the came March 2020 crash which crashed my portfolio by more than 40% which made me realize how important it is to be in 10-15% cash to take advantage of any opportunities which may come by. Still on the bright side, since I was invested in ‘coffee-can’ type companies, I knew it was not about ‘how’ but only a matter of ‘when’ these companies would recover. So I completely switched off from following the news and markets for about 5 months to avoid any rash decisions and then by July, my portfolio was in green. But I cashed out bulk of my portfolio without any major profits or losses to avoid facing the same situation again due to the uncertainty in the markets.
At the same time, seeing everyone around me making profits at the flick of a finger, caused me ‘FOMO’ and I invested small amounts for short-term in few pharma stocks in August/ September to rake in some moolah but it made me realize its not worth the anxiety it causes and I stopped doing that after making some thousands. Post that, I decided to finalize an approach for investing since I realized without one it is not possible to survive in markets and it can drive you crazy.
My learnings from the above :
- Never buy on tips, FOMO, JOMO, etc. and buy only what you can understand.
- You can copy the stocks but you can not copy the conviction.
- Most important - Keep things simple in investing and in life.
So from 2021 onwards, I have decided to follow the below investment strategy for long term horizon (10+ years) and no short term investing/trading.
- Have a focused portfolio of 10-15 stocks (preferably around 12).
- Return of capital is more than return on capital to have sound sleep and peace of mind.
- Doing SIP in stocks every month with equal weighted amount.
- Remain invested in these stocks as long as the fundamentals and conviction remain intact.
- Buy and sell rarely.
- Looking for CAGR of around 12%.
- Keep 10-15% cash always to take benefit of any opportunities.
Below is my current portfolio :
Watchlist : Tata Consumer Products, Deepak Nitrite, Whirlpool, Dr. Lal Path Labs.
I am still 44% in cash and plan to keep doing SIPs in the 8 stocks I am invested in every month since I find it difficult to determine the right price to enter but want to continue the investing discipline.
I have been investing in Direct Mutual Funds since 2015 and will continue doing so in future.
Look forward to your esteemed views/suggestions/feedback.