I started investing in cash stocks in Apr 2020, when every news channel, top analysts were predicting #NIfty to touch 7500. I am chart lover and could saw some golden opportunities in investing at reasonable prices during this time.
Question before me was what if stocks falls more and more ?
How would I cover my losses?
Answer : #Diversification : I have gone through many charts and have seen Plenty stocks outperforming indices which can be easily seen on charts (its easy if one has practice/grasp on reading charts). So thought of diversifying across all stocks a small percentage of capital (Lets say 10% or fixed amount of Capital) in each stock comes in my setup.
#Diverfication is the most important thing in investing. Nobody knows which stock will be going strong in future. If someone talks about companies with strong fundamentals would be Mulitibaggers believe me, there is no such strong fundamental in stock market or I say there is no safe stock in Stock Market. Fundamentals changes within 24 hrs/Overnight. Its only the diversification of your Capital saves you and multiplies you capital.
So, if we diversify our investments across different stocks/Sectors. I am sure 10% of your selection will show fantastic results as mine.
Look below some of my buys during lock down period
Best buy in above list are Granules, Rallies, Balamines like stocks are up by 20 to 71% in a month, One can see only 5% of stock covered my entire in other stocks which I closed at 10 to 15% losses and placed me gainers
Now have a look on my Open Positions
One can find out the profitable trades are more and looser are less.
One thing learnt here. "Cut your losses and ride your winners". If you see my above closed positions you would find some stocks like #Muthoofin closed in small profit and today its double from my buy ares.
By adopting this I am up by 500% Cumulative gains (8% ROI per month) which is excellent as a beginner
I hope this would make changes in your trading. Please give thumps up if you like it.
Thanks for giving your time.