Thread by @DAmmannaya

A COMMON MISTAKE INVESTORS MAKE, in my view-

“Expecting All Stocks to RISE Together.”

Even worse,“Expecting them to keep Rising Continuously, esp if NIFTY is in the GREEN & Up Trending.

This is NEVER Going to Happen. If it DOES, then…

#investing #invest #StockMarket #stocks

…either you are in the 1st/initial part of a Brand New BULL MARKET or at the FAG-END of it or of a Long BULLISH PHASE!

So,Very Rarely do all Sectors/Stocks trend in the same direction, which is because Money has to park in some place and leave some other place. This is a very..

…”DYNAMIC” Process and you have highly diverse Individual Investors, DIIs, & FIIs who all have a mind of their own.

The NET Collective Wisdom of all of these participants with a skew towards ones with greater weight around them ultimately dictate a trend, that’s ultimately…

….known to NONE (Just like STOCK TARGET, which is known to None, but collective market forces get us to that point)

SWIFT “SECTOR/STOCK-ROTATION” will always keep Investors in DOUBT even in the Best of Bull Markets.

As explained, this Constant Stock/Sector Rotation CAN’T be…

…predicted by anyone.

Only way to Make the Best of a BULL MARKET therefore, would be to have a “Reasonably DIVERSIFIED” PORTFOLIO, majorly in Highly Liquid stocks & restricting MicroCaps to 20-25% such tht NOT more than 5% in any individual Scrip.

If it’s a 5% Rule, then for…

…the starters you have a 20 Stock Portfolio as an example.

As Markets Hit New HIGHs and newer sectors find favour, you would always have ONE part of your Portfolio make NEW HIGHs everyday.

For instance, ever since I started Tweeting Stocks on 24th JULY, 2020 (i.e…

…amongst say 110 Stock Ideas so far), almost always there would be 6-8 of them Hitting New HIGHs every single day,as I pointed out sometime back as a rationale to post these lists at the End of the Day (just to give one an idea as to which sector/stocks are in favour) and over…

..last few days it’s been 10-11 consistently. So this where, DIVERSIFICATION comes into play,as a Part of your Holdings is likely to keep making Fresh HIGHs if one is adequately diversified.

Obviously for those chasing Returns,one may strike a balance by NOT Diluting the PF by..

…OVER-DIVERSIFICATION,but keeping it diversified enough for you to feel SAFE & also keeping it sufficiently concentrated as desired, which I called as reasonably diversified.

There is NO “ONE-SIZE tht fits All” here. This can be tailored as per one’s Experience & Risk Appetite.