Part 5: Process or How the heck do I Invest in Equity Successfully?
5.2 What will get your Mind committed to Process?
The scale and dynamic nature of the stock market pose big challenges. What are the challenges to actually taking the decision?
The first thing that hits an investor is the large number of possibilities where he could put his money. There are about 5000 listed stocks in India. All you need is about 25 to 30 stocks in your portfolio at any point of time, the ‘right’ ones to succeed. Similarly, there are hundreds of funds to choose from.
This is further complicated by the bombardment of opinions, pitch, noise and din of the market, media, influencers etc. It’s mind-boggling. Where does Process come in?
Investing is about making decisions. So, we are talking about a Decision-making Process. We don’t do anything else to make the money. Now, to make a decision on buying a stock is not very different from making a decision to buy anything. You got to know if what you want to buy is worth buying, what is the price you should pay for it and should you buy it now or wait for a better price.
Buying is an activity we do very often. However, selling is quite infrequent. And selling something for a profit is a very rare event in our regular life. However, selling is an integral part of investing. And we need to be equally adept at making selling decisions as buying ones.
But the big complexity in...........Read More
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