I am not
calling out the bottom of the market or anything of the sort by making the
above transactions. As I have repeated often in the past, no one other than
liars and self-delusional people can predict what the market will do in the
short term.
The best
approach always is to look at each individual company closely and evaluate how
it will do in the next 3-5 years including under stressful macro conditions.
As we add to
the model portfolio, a few positions will not work out – that is a given. The
key is to ensure that we do well on an aggregate basis and the returns are
above average over time. This approach has worked for me over the last 20 years
and I think is still the best approach to follow.
Although we are
analyzing as rationally as possible and making a tough decision to start adding
to the portfolio, it will be painful to watch the portfolio drop almost on a
daily basis. After all these years in the stock market, it is equally painful
for me. The key is to focus on the long-term prospects of the companies and their
intrinsic value and not react to emotions which will lead you to the wrong
decisions.
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Stocks discussed in this post are for educational purpose only and not recommendations to buy or sell. Please contact a certified investment adviser for your investment decisions. Please read disclaimer towards the end of blog.
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