Here are some thoughts we should align on before moving forward -
[ ] Correct KPI to measure the performance of your portfolio is XIRR - Extended Internal Rate of Return. Not profit, not % returns, but XIRR.
XIRR is a proxy to CAGR in cases when you invest money at multiple points in time.
[ ] You should feel excited [and not sad] when a company starts to get priced lesser than it deserves - you can now buy it cheaper.
[ ] Just like a baby cries and asks for milk, your portfolio asks you for money. The indication for it is when 3-4 stocks have fallen by > 20%. At this time, you should water your portfolio with more capital, which would later drive your XIRR upwards.
[ ] Don’t look at the portfolio daily or even weekly. This keeps your emotions in check and lets you play the long term game.
You essentially outsource the whole psychology management part to us - something which serves as a barrier between a new investor and their returns. We work such that you remain completely free of psychological ups and downs. Making returns in the market is more about managing one’s psychology rather than other stuff.
[ ] Gravity for the market is upwards, not downwards or sideways. So up is where the market goes finally, not down.
[ ] Markets can be irrational in short term, but efficient in the long run.
[ ] Here’s what you should focus on -
[ ] Stop reading market news, stop tracking the market or listening to tippers / Youtubers / Telegrammers henceforth. Especially while in a bearish market.
[ ] Remember that our companies behave differently than the Index and mostly are not a part of it. So ‘market kahan jaega’ is not even a question to be asked.
[ ] How much profit a company produces has no relation with the direction of Nifty50. Remember that long term investors bet on companies’ profit-growing-ability, not Nifty50.
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<aside> ⏩ Next Up*:* Onboarding Checklist
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