2018 has been a year of learnings. Investors have learnt the most on banking and financial services sector. The PNB - Nirav Modi scam and the asset liability liquidity crunch in the NBFC sector were the highlights of the year.
The year for an investor teaches us to be vigilant about happenings (good, bad, ugly) in the market, sector and companies invested. Good turns to bad to ugly very quickly and without constant portfolio monitoring one cannot sleep peacefully. Obviously even with such review unfortunate events would happen which would force us to take tough decisions. Cutting losses and redeploying capital is much better than running one’s investment operations on the hope of better performance.
Few things we can do to manage our portfolio:
1. Limit individual holdings to max 5-7% of portfolio value and not shying away from selling / adding to rebalance.
2. Reviewing ones under performers to assess if a) have you got in at the right price b) has the fundamentals of the business changed impacting valuations. If you got either price or valuations wrong good to cash out.
3. My all time favourites. Increase aggression by buying more into your winners.
Happy Investing for 2019!!!
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