My Averaging strategy

[smallfish]

Hi

I am in equities for the last 10 years..have not been burnt, and not made a ton of money as well.

I found out that despite fundamentals, every stock goes through ups and downs. I have always read and heard that averaging is bad, but I have found it to be useful many times. So I am confused.

My strategy is usually as follows:
- Look out for a decently priced company (low PE, PB ratios)
- Look out for price drops in that company and enter.
- Say I buy 100 shares at 100 Rs so spend 10000
- Wait for the stock to rebound
- Once it does, sell 90 shares at 10000, and recover the principal.
- Keep the 10 shares as long time risk free investment.
- Look out for new decently priced company...

Sometimes this rewards very well, and 25% of the times, the stock declines as well below my original purchase price, but I have atleast recouped my capital.

I am no expert, and am really impressed with the knowledge of folks on these forums, so wanted your thoughts on whether I am doing the right thing..

Thanks in advance.

 

[niftyoption]

Hi

I am in equities for the last 10 years..have not been burnt, and not made a ton of money as well.

I found out that despite fundamentals, every stock goes through ups and downs. I have always read and heard that averaging is bad, but I have found it to be useful many times. So I am confused.

My strategy is usually as follows:
- Look out for a decently priced company (low PE, PB ratios)
- Look out for price drops in that company and enter.
- Say I buy 100 shares at 100 Rs so spend 10000
- Wait for the stock to rebound
- Once it does, sell 90 shares at 10000, and recover the principal.
- Keep the 10 shares as long time risk free investment.
- Look out for new decently priced company...

Sometimes this rewards very well, and 25% of the times, the stock declines as well below my original purchase price, but I have atleast recouped my capital.

I am no expert, and am really impressed with the knowledge of folks on these forums, so wanted your thoughts on whether I am doing the right thing..

Thanks in advance.

Dear Smallfish sir

i want to give one suggestion please dont do avarege in a falling market ....
and also very low PE stocks may move slowly becareful in those stocks ...
if that stock continuously fall like unitech and sks micro , A2Z maint , what is your situation , so dont do like that ..... please thnik once again to enter a trade please take it possitive sir , ALL THE BEST SIR
THANK YOU SIR
:thumb:

 

[rsjadhav]

Sir, You are doing well, but I am giving some suggestion ,
1)Invest slowly that means regular way i.e. sip.
2)Find out sector which is best and you know about that sector.
3)make sip 1 year horizon , definitely you get money,
3)Make good portfolio , make it diversified,80% good stock,5 % penny stock,10% small cap,5% mid cap
4)Read newspaper,inf of company regular time.
5)Make your own strategy.


Best Luck for good investor and trader.

 

[niftyoption]

Sir, You are doing well, but I am giving some suggestion ,
1)Invest slowly that means regular way i.e. sip.
2)Find out sector which is best and you know about that sector.
3)make sip 1 year horizon , definitely you get money,
3)Make good portfolio , make it diversified,80% good stock,5 % penny stock,10% small cap,5% mid cap
4)Read newspaper,inf of company regular time.
5)Make your own strategy.


Best Luck for good investor and trader.

Dear Sir
Investment is based on so many parameters like ROE, ROA , Growth rate , fund flow , management like that based on only PE is very difficult sir , this is my view , Investment is completely based on holding capacity and risk apatite , Ex: Japan Nikki index 20 years back 40000 , it was fall from that level and it reached 5000 levels for gradually around 10 years , so like that if it happen in your buying stock what is your next step

think again and again and take step .....

 

[lemondew]

This strategy is best for Public sector banks, govt oil companies, large caps etc. Such companies will never loose out due to govt bail outs. These shares will not become like unitech.

 

[toingpoing]

Hi

I am in equities for the last 10 years..have not been burnt, and not made a ton of money as well.

I found out that despite fundamentals, every stock goes through ups and downs. I have always read and heard that averaging is bad, but I have found it to be useful many times. So I am confused.

My strategy is usually as follows:
- Look out for a decently priced company (low PE, PB ratios)
- Look out for price drops in that company and enter.
- Say I buy 100 shares at 100 Rs so spend 10000
- Wait for the stock to rebound
- Once it does, sell 90 shares at 10000, and recover the principal.
- Keep the 10 shares as long time risk free investment.
- Look out for new decently priced company...

Sometimes this rewards very well, and 25% of the times, the stock declines as well below my original purchase price, but I have atleast recouped my capital.

I am no expert, and am really impressed with the knowledge of folks on these forums, so wanted your thoughts on whether I am doing the right thing..

Thanks in advance.

Your strategy is very good. But go for only blue chip. Select Industry wise first,then leaders in that and then historical price movements. This will insulate you to a great extent from steep falls.:thumb: