Standard advice which everyone gets in life is not to follow others but create your own path.. Is the same applicable in equity investment as well ?
There is no need to attempt becoming 'Hero' in this market unless you are really a Hero..what does this mean ? Simple.. if you have the wisdom to interpret what could be the next trend in this market then definitely go for it which means you are able to see something which others have not been able to see it yet. However if this art does not come easily to you then there is no shame in simply going with the flow as long as you are able to identify the direction of the flow.
Identifying the trend and simply following is easier than predicting what could be the next trend. Your chances of going wrong are less here and you can still make good returns following the general market direction. Let me give an example...We are in end 2016 now.. and since last couple of years trend is that private banks, NBFC (Housing Finance, Micro finance, Vehicle finance etc) are the flavor of the season and if you are invested in them then you would have made good 25% kind of returns over these several years. Currently IT, Pharma are out of trend. If you can spot when these will be the trend of the market again then you can make much better returns but generally an average investor gets too early in these situations and then gets frustrated before it becomes full fledged trend.. However by keeping simple checks on the market you can find out what is the current trend...It was not that difficult to find that in 2016 that specialty chemical stocks is the new flavor
So if you are successful contra investor then great..but otherwise also you can make good steady returns by just following the trend..
Speaking of myself..I am more of a follower of the trend. I try to find out what is in the trend and always on look to see if the trend direction is reversing or continuing. My aim is to generate returns on my investments and there is no shame in being a follower there.
There is no need to attempt becoming 'Hero' in this market unless you are really a Hero..what does this mean ? Simple.. if you have the wisdom to interpret what could be the next trend in this market then definitely go for it which means you are able to see something which others have not been able to see it yet. However if this art does not come easily to you then there is no shame in simply going with the flow as long as you are able to identify the direction of the flow.
Identifying the trend and simply following is easier than predicting what could be the next trend. Your chances of going wrong are less here and you can still make good returns following the general market direction. Let me give an example...We are in end 2016 now.. and since last couple of years trend is that private banks, NBFC (Housing Finance, Micro finance, Vehicle finance etc) are the flavor of the season and if you are invested in them then you would have made good 25% kind of returns over these several years. Currently IT, Pharma are out of trend. If you can spot when these will be the trend of the market again then you can make much better returns but generally an average investor gets too early in these situations and then gets frustrated before it becomes full fledged trend.. However by keeping simple checks on the market you can find out what is the current trend...It was not that difficult to find that in 2016 that specialty chemical stocks is the new flavor
So if you are successful contra investor then great..but otherwise also you can make good steady returns by just following the trend..
Speaking of myself..I am more of a follower of the trend. I try to find out what is in the trend and always on look to see if the trend direction is reversing or continuing. My aim is to generate returns on my investments and there is no shame in being a follower there.
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