Tracking 40 names may not be worth the effort. To some extent, it again feels like an index fund. And should these stocks have equal weightage or weight depends on the index? Should better performing stocks be given more weightage or even if underperforming but undervalued stocks should be added more? And if one stock does not fit the criteria, should it be changed with a better performing stock, and what duration of underperformance should be considered here? And one may feel to allocate more to some stocks and have only small portions in other stocks because he knows more about some sectors etc.
Also if one is investing in direct stocks, I don’t think a comparison with indices is necessary, in the sense that, if I am underperforming w.r.t Nifty 500, should I stop and invest in Nifty 500?
There are many ways to do these things, but if we are going broad with the idea and the work, then we may have to spend considerable time doing it to come to a conclusion of continuing it or stopping it.
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