There are many sides to investment effort, even a long term strategy.
(i) It is impossible to time the market theory- this is right for self-styled long term investors like me. I can never forecast the market for today, tomorrow, a month later or the next year. So, people like me are long term investors because they don’t think they are capable of trading.
(ii) Will you stick to a share while the rest of the market gallops away? Show me a person who has not regretted missing the API rally in 2020 and the Defence, PSU & PSB rally in 2022, while sticking to IT?
(iii) Try to be nimble, keep up with the momentum- this comes after you have missed the waves. But then what happens? As soon as you sell Infosys and buy Bharat Dynamic, the trend will change.
(iv) Even following the price momentum has its hilarious moments. Tiger Logistics has less revenue this quarter, but the profit is up. You stick with it for two days, while it keeps falling. Then after it has fallen by more than ₹50, you sell. And there is buying in the stock.
(v) It is about emotional balance: One would keep emotions under control when you know the intrinsic strength of the company, but its stock is falling. But when you have bought a comparatively unknown company and it proves you right for a few months, but then when the results are bad, all doubts about the management start surfacing, and you get out of the stock as far as possible.
So, it is about thorough research and emotional balance, but research is told to go stand in a corner, while your emotions take the centre stage as soon as the results are bad, or the stocks fall badly, and you realise that the stocks that that kid suggested to buy have doubled.
Ultimately you realise you have ended up more brokerage than the profit you made in the market.
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