CONCEPT OF EMOTIONLESS INVESTING TOWARDS CREATING EPIC WEALTH

Live example: Reliance Power a bankrupt company has rallied by 69% in one month.

Retail investors will get lured toward this stock.

Why should a retail investor not think that this bankrupt stock can continue to rally and even rally by another 50% in just the next 15 days?

Such thinking has 0 logic and 0 basis attached to it but it can still happen.

So what should any sensible retail investor do when they see such bankrupt companies rallying magically?

You should do the same BORING, REPETITIVE stuff which giant investors do.

IGNORE such stocks completely.

Continue to buy stocks like TCS, HDFC Bank, Asian Paints, Pidilite Industries, Page Industries, Bajaj Finance, and Nestle India and continue to secure your future by ensuring that you lose no money either by getting into bankrupt stocks or through overtrading.

All you need to do is to:-

1. Shortlist 8 to 10 sunlight sectors.
2. Sectors like FMCG, IT, Chemicals, and Paints are some Sunlight Sectors.
3. Completely avoid Sunset sectors. Sectors like Airlines, Infra, PSU Banks, Power etc.,
4. Give up on the thrill of penny stocks like Reliance Power, Vodafone Idea, IOB etc.,
5. Then invest with composure in the shortlisted sunlight sectors.
6. Focus on remaining diversified by never putting all your money on just one stock.
7. Focus on creating a long-term eternal portfolio.
8. A portfolio which can happily compound by 15–17% annually for 25 years.
9. This ends all doubts for you. For clues, some stocks are discussed below.
10. Stocks like TCS, Asian Paints, Pidilite, Bajaj Finance, Infosys, HDFC Bank, UltraTech Cement etc.,

Finally, one last crucial concept that you need to remember during your investment journey is to never sell in a crash. Never panic, also during the normal investing and holding days focus on reducing your transaction costs. This simply means avoiding selling your good stocks frequently. So, stocks like TCS, Asian Paints, and Bajaj Finance are life shares. They do not deserve to be sold and purchased daily.

BUT

What to do if a good stock crashes by 50% on sudden news for Reliance Power?

Be calm. Read. Understand the core issue involved. Then if it genuinely looks ominous leave the stock on every rise. This is a rare possibility. Still, you need to be prepared. If you look at the history and the fundamentals of stocks like TCS, Asian Paints, Bajaj Finance, Pidilite, and Nestle India you will realize that these companies are more than 30 years old. That is why such declines are rare in good stocks but still, one should be prepared.

Let me also assure you that if you select 18 to 20 good stocks and invest in them then you are bound to make money and 1 or 2 stocks not performing well even after all your hard work, diligence and research in portfolio building is a normal thing and a part and parcel of investing. So getting it 100% correct is tough. So, I hope this write-up constructively helps you. I wish you well in your investment journey.

Disclaimers: Views shared are personal. The stocks discussed by me are all a part of my portfolio. Please consult your financial adviser before taking any investment decisions. Take my write-ups for informational and educational purposes only.