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  • Category: Miscellaneous

    Investment concept: How to use procrastination positively in portfolio management

    Are you a procrastinator? Do you feel ashamed of your procrastination? Don't feel ashamed. You can use this vice in a positive manner in investment. You can manage your portfolio in an excellent manner if you are a procrastinator. Let me tell you how.

    Let us suppose you have developed your own portfolio. Serious investors know it very well it takes more than 2-3 years to build up a portfolio according to the specific needs of an investor. Now, let us suppose, there is some major upheaval in the market. Let us suppose, suddenly the equity market starts moving upward and the gold market is moving downward. Then many investors will churn their portfolio being unduly affected by the sudden movements in the market. This churning will further disbalance the market and also increase the portfolio churning cost for the investors.

    On the other hand, a procrastinating investor will not churn his portfolio so quickly due to his procrastination. He will procrastinate, think deeply and then he will see that during his procrastinating period, the market has come out of upheaval and everything is quite alright.

    Thus, the procrastinating investor will delay the churning of the portfolio, save the churning cost and won't get unnecessarily affected by the temporary upheaval of the market.
  • #627139
    It is said that on an average, the market crashes once in a decade resulting in upheavels in the market. The investors get panicked and start selling their stocks resulting in huge losses. The secret to manage such a scenario lies well in not getting disturbed and stay invested as the market is bound to get corrected over a period of time.

    Taking into consideration the above points, there appears some sense in what the author of the thread has stated.

    Let us encourage each other in sharing knowledge.

  • #627141
    It is true. I have seen some people get panic when there is a downtrend in the stock market and try to sell their shares with a fear that they further come down. Many people think like that start selling those share. Somebody who is having the correct analysis of the trends may purchase them. But many some people they don't get upset for some downfalls and they give some time to see that the dust will settle and more clarity will come on the issue. By the time all this happen the shares will generally come to the stage of not selling. That is how this nature of postponing the things will help sometimes for the investors. I agree with the author in this respect. I generally don't invest much in share market. So I have no problem. But I concentrate more on MF. I will go to my portfolio Manager. I will act according to his advise.
    always confident

  • #627419
    Balancing the portfolio or churning can be a double-edged weapon, if done without proper planning and facts, the investor stands to lose more.

    If balancing the portfolio is done with some stocks when the market is rising steeply then one can do partial profit booking, keep money liquid and re-deploy it when the markets start correcting.

    The other time we can think of this is when a particular equity is not giving returns as we expected or an unexpected trend has arisen in a specific sector, then we need to act. When we look at Suzlon and inox wind (alternative energy) this never took off, I had exited and got into SpiceJet which was rewarding. So, it has its role when some developments cannot be ignored.

    Churning, depends on the mindset of the investor and the time horizon, for some who are in for the long haul would ignore the short-term fluctuations as they tend to settle down.

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