Excellent stratergy for those who are enterprising, but are not full time into the stock market.

Originally posted by basant Manish - With a four year experience in the market you do think quite sharply. While your strategy is different from mine in several respects I do see that there are many Teddies who are more inclined in getting sharper each day and once that becomes a habit results will follow.

Manish - Great thinking!!

I am close to an Year old into Stocks markets & a salaried professional. Although in last 1 year, i have done quite a few mistakes including the ones mentioned by you ,but i am trying to learn from my mistakes. I guess i got away with the mistakes as i was riding my luck during the Bull market phase.

I am already in the process of restructuring my portfolio in two themes

- One - Diversified portfolio investing in various different stocks (around 15) from various sectors. The stocks are bought with a predetermined buying price & with a "not so long" term vision & idea is to get a predetermined return from a particular stock after which i review whether to re-enter into the same stock or enter into a more lucrative stock.

- Two - Concenterated long term porfolio including 3-4 good stocks where i am extremely confident around consistent long term growth.

Both themes will be 50% each of my portfolio

SK

my

Originally posted by manish_okhade After spending round the clock 4 years in investing world i realizes that:   1) There is no formula or recipe by which one can becone rich. Each gr8     investor has its own style and philosophy. This style evolves from one's     background since chiledhood, environment, pedigree etc. 2) There are so many randoms in the world for any business to get     affected. So investment is a strategy for managing odds and very     much a individual skill driven by one's domain knowledge and     temparament. 2) Investment strategies (Growth, Value, Turnaround,VC etc) varies a lot     from person to person depending on one's risk appetite.   Having said above I would like to start with very conservative strategy as given below:   Objective: To earn decent return over hard earn money from the job over a period of time horizone of 3-5 yrs. Risk appetite is low to moderate.   Target Audiance: Full time salaried professionals with dependants.   Strategy:   1) Cash flow from salary is divided into 3 parts -     a) for EMI of house/car etc.     b) Save N months salary in debt/FD for rainy days.  N is a subjective no.     c) Divert now leftover cash in a Debt scheme for future trades   2) Constantly search and analyze the businesses for their merits/demrits and make a list of them if one would like to buy if available at say all time low withoust hesitation. For example there seems to be always a least risk in buying strong MNC FMCG stocks on economy collpse.   3) Control your greed when theres a riot in the market, Bulls are rampaging, all future forcast looks feasible. Intially one is hesitatnt but due to past few qtrs strong earning makes one to believe and prepares them to buy the businesses at higher prices. One goes into trap that Worst is Over, growth isresumed so underlying business deserves higher valuation.   4) Invest bull phase period in analyzing great businesses and be remain idle. Invest equal time in honing one's main professional skills which saves the one in downtime.   5) Enter is the identified stock on dips in the comfortable buying range. Buy not in single shot instead average it out.   6) Never ever assume that one is oversmart, always see before buying whether Mr Market is right. Most of the time its right, only few times its wrong and one should spot it with care.   Results: I divide my portfolio in 3-4 themes. A portion of my portfolio is based on above describes themes. At least for past 3-4 years, this theme seems to have given me best results. Though it could be wrong observation due to recent turn around of market.   Caveat: Following above mentioned strategy is i found against human nature. It needs strong mental control to tame the elephant when it dances in your stomach on bull run. Greed overpowers when you see many TEDs are getting rich by investing in stocks which looks to you expensive by any standard . At this stage one feels left out in the crowd and started doubting one's core belief.   Comments as well as other such investment themes are welcome from all TEDs.