Hello folks
I started investing a few years ago, and over time built up portfolio of stocks. I have 3 accounts that I manage for my family and there are a few different stocks in each of them. Somehow I am not confident to take bigger positions in each one, and hence the spread.
Given the spread, I’ve found it difficult to keep track of which stocks are seeing a sudden change in outlook / sentiment and exiting in a timely fashion.
What tools do you folks use to keep track of any actions you might need to take on your portfolio and the rationale for that ?
Sharing my personal experience - last year at one point i had 42 stocks on my portfolio. I was in a similar position where I did not feel confident in taking big positions in few stocks. Then when markets started to fall - i ended up selling all but 13 of them.
What i learned was -
- having more positions make it easier to lower your risk - and that too significantly when market goes down. Not all shares fall the same % on the same day, or the same % over the same period. This helped me lower my losses a lot.
- Having fewer stocks is easy to track. but then you limit your portfolio growth to a few of them only. Suppose you hold 10k ITC shares (worth 40L) - so now you will need to keep you eye on every news for it every day and a small change in laws can have a big impact - suppose cigarette taxes go up. Unpredictable market moves can give huge upswing or downswing. For a handful shares - you would need to make sure they are the cream of the crop and wont be hurt much. Mainly nifty 50 ones.
- By diversifying - i gained a lot from different sectors. I had in many sectors - health, oil, gas, renewal energy (hydro, wind and solar), power, thermals, cap markets, banking, metals, zinc, iron, alcohol, insurance, railways, transport, shipping.
- By diversifying i lost on some big wins in a few stocks thar rallied like anything - railway, banks, renewable energy - i had small amounts in them so on % i gained a good amount, but also I lost in money growth.
- When FII started to sell - i did not realise the impact and waited a long time to start selling because stocks only went down a few % a day. Looking back i saw how much they were falling on a cumulative basis.
- Buying a few handful ones usually means investing for the long haul - as you are focusing on ownership over gains.
- Large caps are more safer for longer haul if you want to limit the number of stocks on the portfolio. Mid and small can jump up or down a lot. Large caps move slow but sure.
- On a single day if a stock on my portfolio went down significantly - say 5-10%, then I used to check the news for it. Else 1-2% up down was fine, and leave the stock on there for future.
I managed my own account - i use Kite and tickertape Pro version - Pro version will let you sync multiple accounts into one to manage. Also Kite has family account system - i have not used it but I think it will let you jointly manage all accounts. You can check it out.
My strategy - focus on sectoral growth - not stock growth. Stock may go up or down, but in the long run most sectors will go up. Example - IndusInd Bank went down due to negative news, while other banks went up. IF you diversified across multiple banks, you saved yourself from huge losses, and got profits to cushion losses from IndusInd.
Hope this helps. Everyone is learning, so feel free to ask any questions. Cheers!
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