Simple Investing

True, it requires a specific mindset more than anything else IMO

You have got it on target here. Precisely that’s why stock selection (sector selection) is important. Even in these sectors there will be long periods of dips/stagnation/ company specific issues that you need to be wary of. A long term hold in FMCG Bajaj Consumer or even Emami has been disastrous in last decade or so whereas same in larger firms like HUL, Nestle, Marico, Tata Consumer has been rewarding.

Consumer durables can have very painful times is what I have learnt over time. They are probably the most cyclic in a structural growing Consumer segment. We need to be wary of that as well.

IMO buy & hold in today’s context is not simply buying in one go or in one small timeframe and holding it. It involves being active during the buying timeframe, once you got the first piece of Stock selection right.

Also, I feel for each stock, there needs to be a story in mind and that story should have a sell condition. That’s even for buy & hold mindset and we need to be aware of those conditions.

For eg in my portfolio, most FMCG names I have are currently in “hold” phase since long time. IT/Retail/Insurance have recently entered “hold” phase after buying slowly around 2019-22. Consumer Durables have been in very gradual “buy” phase over last 2-3 years. Had I not been in need of funds, Consumer durables would have been a strong buy for me. I am well aware that such strategy over last 2-3 years have dampened my CAGR but I don’t need to provide an yearly report to any Senior management over this.

The only flip side to such strategy is if one is in need of funds during the partial portfolio building phase, then there is a clash and that’s what we need to plan for better. People who practice momentum investing are much better off in this aspect as they are masters of selling and have constant cashflow from their portfolio which can be utilized in case of need.

Disc: Views personal & only for academic purposes. No buy/sell recommendation. No Portfolio strategy recommendation. I can be wrong in all my assessments