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 and average down your price!
[ ] 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. This keeps your emotions in check and lets you play the long term game.
[ ] 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.
<aside> ⏪ Back to Get Started
<aside> ⏩ Next Up*:* Onboarding Checklist