In a nutshell, I invest directly because I enjoy the process, feel like I’m gaining better knowledge about businesses, and stay informed about what’s happening in the business world. I have been investing since 2012, and here is my journey if you have more time to read

For the initial two years, I engaged in day trading whenever I had the time, whether resulting in profit or loss, but I used to enjoy it. I believed I had made some money, but when I carefully examined the numbers, I realized that all the profit was wiped out by brokerage charges. I only gained experience and realized that trading is not for me.

Subsequently, I have asked ICICIDirect to handle my account under the wealth management service. I invested around 2 lakhs, and they only invested in one stock without making any further moves for the next two years. Although the stock gained 40%, but it didn’t bring me satisfaction.

In 2015, I began investing in mutual funds for tax-saving purposes and simultaneously started investing in direct stocks (only in a few thousands since I’m not confident enough) by reading books and following some good blogs. Again, I was not satisfied with mutual funds, not because they weren’t making money (some of these funds are still holding, and XIRR is around 16%), but I stopped investing in mutual funds and returned to direct investing, this time with a long-term approach. I still hold some two stocks from 2017.

From 2017 to 2020, I exclusively invested in direct stocks, using all my money, including some funds from the mutual funds I sold and money drawn from PF (yes!). During the 2020 crash, my portfolio went down almost 40%, and I didn’t take any action with my portfolio, neither buying nor selling, until October 2020. From October 2020 onwards, I started buying again.

Fast forward to today, I have achieved around a 20% XIRR on the overall portfolio, with approximately 70% of my investments in direct stocks. However, after witnessing a 40% drawdown during COVID, I made a slight change. I began investing in mutual funds through the SIP route to take off some risk and leave it to fund managers. My mutual funds are also performing well, with an XIRR of around 18-20%.

In conclusion, investing in direct stocks gives me a kick and excitement Now I know where to spend all my free time, even when I retire from active life. I have sorted out my post-retirement activity, which involves reading and investing!

what’s fishing ? recent 19% move and today opp to market movement?

Basket Approach in non-core holdings – Financials

I will continue with my plan with building basket approach in my non core holdings – financials ( 6-7% in each hdfc, kotak, icici, bajaj finserv) as stated earlier for following reasons

1. The role of non – core holdings is to let me allow to hold my concentrated core positions as long as their terminal value or franchise value is intact
2. I dont want to be too adventures in non-core holdings. Its job is to provide buffer and allow me to be aggressive in concentrated positions
3. Basket approach enables to take large allocation in a diverse financial which has long runway of growth
4. They also provide good exposure to amc, insurance and brokerage business from both the sides – agency and product
5. In my judgement equal weighted basket of 6-7% in each – hdfc bank, kotak bank, icici bank and bajaj finserv provided similar risk reward over a long term to any other large cap lending or non lending financials with better diversification of revenue streams
6. More importantly, it helps to stick with the plan on day like today.

This is what I was going for, along with the fact that direct stocks investing is very time consuming, as we all know, and whose results could surprise us on the negative side. So some may feel that they have lost opportunity and time by doing this, despite working for it.

So it is recommended for many to start with MFs, understand the markets, understand volatility, gain some experience, and one can start dabbling directly, and go forward.

Your participation and management is very structured and even if some mishaps happen here and there, it wont be significant. And it appeals to some, and they can emulate and build what you are doing.