I was referring to my investment and not looking at linear chart. I am invested in SBI Nifty ETF next 50. When I buy, I keep a target price for the market price to go before I sell. This should be minimum of interest cost on FD plus a margin. This is the benchmark. So when it reach the benchmark, I sell a portion. A revised target is then kept for the stock - could be 20% over the then current market price. Will wait and watch, and if there are dips from that level, will start to accumulate for the next level. In case of SBI ETF Nifty 50, does not fall and continue flat for some time, will start to accumulate in small portion and fix a limit to sell. Been doing the above strategy since March 2020 and this is the only way I bring down my average cost of investment.
Same with SBI ETF Nifty 50. Entered at 124, went down below 90s now at 188. But this etf is not for sale, as
I want to hold it. No internal targets for this one. Will buy as and when it falls below certain levelâŚ
Just to gloat, I have sizable quantity of ITC and my average cost is 10.18 per share. Just did the above since 2010 onwards. Once my average cost of a stock comes below a certain level, I just remove it from daily monitoring.
The examples I gave are my own investments and it has done well for me.
All the rest of the points on market price, what to do and what not to do does not apply for me. I strictly go with my targets and never regret on selling. After selling, if I feel the regret then I should not be in stock market. When someone sells, there must be a reason for them to sell, either meet your internal target for price or you need the money for something else.
My father owned MRF in physical form, he was working for one of the group company and he always used to say he had good quantity. He sold it and took cash as he wanted it long long time ago. Now, do I regret that the same MRF is now 96,000. It does not matter. When my father sold, he was happy to sell it as he wanted the money. Same story with Pfzier found a share certificate with sizable quantity, but had to give it to my sister as it was in her name.
This so called golden rule was coined by whom, I am sure by some broker or AMC. In any case this is used to impress undergrad students by people like Mohnish Pabrai when they gives lecture in MBA schools.
Here people trade day in and day out and this golden rule is kind of not applicable here.
Why do you say the mistake was huge, just because you lost on investing at that time. All this is on hindsight .
The market never shot up from 12,000 to 15,000 in one day, as per the graph, it was 7,000 in 2014 and went to 15,000 in 2019. You had ample time to invest during this period. In fact the market gave you great opportunity when it fell from 11000 to 8,000 during 2020. You could have used this crash to buy in.
I very well understand what you are saying. Itâs just that you do not understand what I am saying.
I have even clarified in my previous post that one shouldnât stop SIP waiting for the DIP. That wonât happen and even I know that. But you should always have some surplus which is ready when the market takes a dip.
Since you are giving a lot of examples, let me also give you one. My own.
I usually maintain equity exposure of 45 percent of my total account value. Another 45 percent in in debt funds. Balance in cash. This is maintained so that I can use these funds again for trading. When markets go up very fast I may underperform a little. But usually my trading covers that. Unless nifty goes up 40 percent every year I wonât underperform nifty. In falling market I always outperform because my portfolio beta is less than one.
Now the 45percent exposure that I was taking about changes if there is a dip. At the time of March 2020, I went as far as 120 percent at 8500 level. (Using Futures).
Russia Ukrainian war time I went till 80 percent. And the last fall at 16800 I took it till 88 percent. From 17800 I started booking and at 18305, yesterday I brought it down to 55 percent. I will again bring it down to 45 percent which was my initial equity exposure may be around 19k level. Now 45 percent exposure is not the same I had it a year ago. I have added more fund and also generated some by trading. So in absolute terms the amount is growing. This is what I mean by I sell extra exposure I took in rallies. From 45 percent I usually donât get it down. If next month we reach 20k then I know there is a small correction and I may bring it down to 20âpercent. Again only if it reaches there next month. My target keeps increasing every month by 0.75percent.
Now whats a dip for me. I get back 18100 my equity exposure will increase to 58 percent again. Even if itâs 18300 next month I will buy because my target has increased by 0.75percent. I wonât wait for even 500 points fall. Every 200 points I either buy or sell. Selling stops when I get back 45 percent.
Basically I do what balanced advantage funds do.
I didnât agree with your view only because you said you buy when it rises. I am of the opinion you should buy irrespective of whether it goes up or down.
I hope I made it clearer this time. I repeat I wonât wait for dip. I am always invested. But if there is a dip I have funds ready. I do not mind a fall of even 40 percent.
Investing and trading are different even if the product is same. Investing does not require any effort or time if the product is an ETF or index fund, buy when funds are available with the belief that the index will go up with time. Trading even in an ETF requires some time and effort, and some plan.
5% profit looks okay, but it may not happen quickly. So think of the maximum capital you can allocate for this, because if profit stays at 2-3% and does not go above, how long will you wait and how much more will you buy.
I used to buy Nifty Next 50, even looked at Nifty Midcap 150, but moved to Nifty later.
Hello Friend,
Since you are asking advice, everyone in this forum are helping you to make better choices .
To your words âmostly buy on dipsâ, I feel pity for you ! If you understand the concept of Trend, you never buy on dip. So please do some home work on âwhat trend meansâ.
Have you hard âVictor Sperandeoâ?
If no, watch some video or buy his book and read it.
