if im investing in 5 stocks should i divide the capital into equal parts or buy is same qty?
100000 rs in each stock vs 500 qty is each stock.
the reason is paper portfolio of Equal amount resulted in 130% Vs Equal Quantity Resulted in 306% p.a.
tracking in valueresearchonline.com.
In my opinion, it should be based on value and not on no. of shares. Also it should not be equally divided on value basis, it should slightly based on which stocks are your favorite(based on study)
For eg, if you are investing in TCS, SBIN, INFY, TATAPOWER, DLF
A sample investment (just for example, not real) would be 15%, 30%, 15%, 10%, 30%. something like this.
Investing based on no. of shares have no meaning, since TCS is at 2500 and DLF is at 160 price.