Saturday, October 15, 2011

Change in my Investment Style

Initially I was investing in bulk per month say 5k/month in a single share – now I’ve changed it to 1k per week – different shares every week
I was initially worried about the loss, I was like if I invest in a share @100 and now it’s is 80, I’ve to invest in a lot more, so that I can average my money. That’s a dead trap, now I’m comfortable looking at the loss and if I believe that the fundamental is still fine I still don’t worry about keeping my loss low. If I find the share interesting I still buy only once a week that too only for 1k, so even if I’m wrong my loss is not substantial.
If the fundamental of the company changesor of the loss is huge – then I book my loss
I’m reasonably good in booking loss, but have not yet booked gains. I believe in staying long term (many many years and exiting only when I need money or if the fundamental changes)
I’ve to work on exit criteria. Should I make 10% stop loss a rule? I’m worried about unnecessary selling and again buying the same share, it will increase my transaction cost. My philosophy is don’t try to manage short term. A good stock even if I bought in 52 week high will still be a good appreciation after 5 years

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