Hi @nithin sir,
I am finding it very difficult to take investment decisions because my mindset has been trained as of a trader. Even if I buy some share as an investment, the trader mindset kicks in and my mind tells me to book profit or to get out by taking a small loss. How to overcome this ? Kindly enlighten me.
Yeah, extremely tough. Very few have the ability to demarcate trading and investing portfolios. We are soon introducing tags on Kite/console. So you can see your portfolio based on the tags you have set - long term, short term, goals, etc. Maybe that will help.
Also, read up stuff on trading psychology, that will help.
Btw also check this
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I might not be as correct as Nithin, but I would love to share a simple thought that might help.
An average ace trader in India is able to generate 28-35% return post tax, for him tasks are - maintain his performance with benchmarking + Understandign when to stay low, w.r.t cycles of the markets(which again takes time to learn).
As an investor, one needs to know where the demand is coming (price action is just an indicator) and allocate with a riSk oriented approach (Systematically as well), he generally keeps liquid and participate in majority of cycles. Long term3-5-8Y. Compounding is his ultimate harpoon.
Markets generate wealth and compound it , as for good businesses. We should generally and systematically participate in it.
“tagging system might help us remind ourself the purpose of participation in the first place”.
As a trader when we invest higher amount of time and focus, Obviously we expect something but higher than 15-20% annual growth. Allocation on the total investable surplus for trading should be taken into consideration while deciding to trade with the Capital." Never put all your eggs in one basket".
Benefits as a trader- You are the closest to the price action, every sector by sector, single digit allocation for long term bracket will always help you see better returns across 3-5Y market cycle.
For example: A trader in Banknifty over 3-5 Y , is well aware of the leaders in Bnf , is effectively in private space(not to name any) + plus there are few PSU names that survives to take the lead if aNy given. So, traders are in the best spot to do a simple allocation on sectorial basis and make a well diversified portfolio, after all an allocation of 60 % for trading leaves you with enough surplus for a Direct equity sip.
You can follow the same for other sectors and a generalized allocation.
In a nutshell,
"UNDERSTANDING THE PURPOSE OF BOTH THE MODES OF PARTICIPATING w.r.t Returns + A clear Target Annual + 3-5 y. (which will help you reach a expected performance to chase y.o.y).
P.S- TECHNICAL ANALYSIS CAN BE COUNTED UPON NOT ONLY FOR SHORT TERM TREND ANALYSIS, BUT IT IS ALSO AN INITIAL INDICATOR OF LONG TERM TRENDS IN THE MAKING.
Happy Investing
Team StockOrganics.
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