Why I booked meagre profit on my stock investment.
Indian Sensex market is still down if I compare it with charts of August-September 2024, but overall it looks to be improving now after touching rock bottom in the month of March to the first week of April. I think those who were able to put some serious money in this period may be witnessing some good profits in their investment. I am not able to take full advantage of this dip as I am out of money in the previous dip and do not have much to invest further. Also, I follow a balanced investment approach, and I try to buy every month.
I keep reviewing my position in the market, and recently I sold one of the stock at very meagre profit that is on my portfolio for some 6 plus month. I purchased the stock (at Rs 92.5) when market is soaring high and I saw an opportunity to make an easy 2-3% on my purchase within a week. But instead market start taking nose dive and stock reached till Rs 71 , almost declined by 23% . I did not purchased at 71 but did buy back the same quantity when stock started recovering at the price of Rs 77, which caused my average buy price at Rs 84.75. With uptrend in the market I saw it reaching and crossing my average price, but the price keeps fluctuating there.
Good news.
I read the reports that told me that company in which I have invested is getting it's additional capacity working. This almost took close to 3 years and now it is going generate revenue for the company, so stock will move up.
I waited for 2-3 days, but stock price did not move upward at all, and I decided to take exit at Rs 86.25 for the profit of Rs 1.5 per share.
Then a sudden regret
I do not know why the market reacted to this "good news" so late, but once I sold my position, it start rising and rose to Rs 90. At that time I felt that I should have held it. But nothing is permanent in the market, and after 2 -3 days, I found stock going down and crossed my stock sell price. Maybe selling was not a bad decision, but I missed the opportunity to sell at a high price.
My overall profit
In this holding period, I got a dividend of Rs 1.4 per share, so I made Rs 2.9 per share, in percentage it is close to 3.4 %, the same profit margin that I was targeting initially, but within a couple of weeks instead of by holding it for almost 6 -8 months.
My 2 cents.
Currently, the stock is trading close to my sell price, and I do not intend to buy more at current prices. If it again reaches around Rs 80 , then I can target it in my portfolio for some 5-6 % gain in couple of months. I believe in getting 3-4 trades of 2-5 % in the stock can be a better deal than getting 10% in a year by holding. Specially, If I consider them decent stock but not predicting multibagger returns from it, then "in" and "out" strategy looks very suitable to me.
Though I am not an expert, nor did I done any formal course on it but I felt my strategy helped me to keep my portfolio green when I saw my friend have all "red" portfolio and getting sleepless night. In some cases, I found them making very bizarre choices by picking up a bad stock because it just matches their weird target like that I can buy Company A's "X" amount of stock in Rs Y. This does not involve the research about company A and where might be company A in next 6 month or year.
To this point in time, I have kept myself away from all these kinds of logic, and I put money in trusted companies, based on their past performance.
It is also not that I am keeping everything in my portfolio as short term goal, but when I feel that it is a decent stock that is in little discount and I am able to get my return soon, then I put some money in those stock also.
At current time, market is yet to reach its peak, and I am already in "green" in my portfolio and expecting much better returns when the market reaches its peak.
I hope, you are also enjoying your stint in market and will like to hear if you have some strategy that helped you in earning profits.
