Many smart investors are reaping a CAGR of 25% to 30% by following their short term investing strategies. Where as ace investors like Rakesh Jhunjhunwala, Dolly Khanna, Vijay Kedia & Porinju Veliyath created wealth by following long term.
Short term strategies yield benefits quickly within a short period of time. In general, short term investment strategies yield returns in 3 to 6 months.
Whereas in longterm strategy there is no regular return. Your portfolio will not be yielding the expected returns in most of the time. If you follow Rakesh Jhunjhunwala or any famous investor you would know that they made the returns only when there was a Bull Market.
You cant even find a single long term investors who made profits in a Bear Market.
Evan Rakesh Jhunjhunwala said in various interviews that he made profits in spurts.
If you invested in right stocks, then Market rewards you when the time comes. But no one know when is that time.
Only God & lier knows when is the right time to invest – Vijay Kedia
I personally suggest you to go with mixed strategy, means both short term and long term strategy parellelly so that you can benefit from markets. No matter it is a bull or bear market.
Caution : You should not compare long term investing to short term. Long term returns are much higher than short term.
Caution : Generally investors will get disappointed when their investment yielding quick returns. To overcome this depression block I suggest investing short also parallelly so investors mind will be more engaged to matkets.
“The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett
Divide your portfolio into two parts in 80 : 20 ratio. 80 % for long term investment and 20% for short term investment.
You can utilise 80% funds for long term as explained in chapter.
And remaining 20% for short term by following step trading strategy.
Note: Never cross the line, whatever the funds allocated to short term or long term investment should be used for that purpose only.
Never tempted by a stock which is corrected sharply and invest in it. Check all the financial and fundamentals of stock before investing.
Never borrow money for investing in a stock. Not even try to borrow money from the funds allocated for short term investment to long term and vice versa.
See the real portfolio example to get more idea of share market investing.
Hi, I’m Sreekanth Thattikota. I use only Fundamental Analysis to find undervalued stocks. I share the stocks that I trust and I invest. Investing in Stock Market doesn’t require any financial expertise, provided it is long term. For any help regarding Stock Market Investing, reach me @ thattikota.sreekanth[at]gmail.com. Happy Investing.