A few days ago, I came across a tweet from an investment advisor that started by saying, "The secret sauce of every successful investment manager is the investor." "Attracting the right kind of investors is the key." On the face of it, this sounds like a strange idea. It appears to say that if an investment advisory service is to succeed, then it should attract the kind of investors who are going to succeed or something like that. Essentially, something circular gets you into a chicken or egg situation about what exactly is happening in the case of a successful investment advisory. Is it giving good advice, or is it just attracting the kind of investors who are primed to succeed?
In Value Research's various publications and services, we have a legion of investors who have generated wealth in mutual funds and stocks. What is the secret to this success? Somehow, are people who are predestined for investing success uniquely attracted to Value Research? That would be too much of a coincidence!
The reality is that an investment advisory service and the investors who are its members are a partnership. In my experience, there are three kinds of investors:
- One is those who seem to have an instinct for learning themselves and will always succeed.
- Two are those at the other end of the spectrum who will always be attracted to the kind of investments that are bound to fail.
- And three: those who have the potential and the mindset to succeed and will be able to do so when they get the right kind of advice and sustained guidance.
This third category is made up of the most successful investors that an investment advisory service can have. They would not have succeeded otherwise, but with the right kind of environment, they do.
So what are the main elements of an investment advisory service's advice and sustained guidance? The main point here is "sustained." The heart of investment is this process. It's like a collaboration. Our job is to collaborate with investors consistently, ensuring they invest steadily and gradually, which is the key to success. Thus, having them securely invested for extended periods and allowing their capital to grow patiently is our contribution to the process.
The investor runs the race, and we are the coaches
Value Research Stock Advisor takes on challenging tasks and stands behind you. Our analysts scour the entire listed universe for companies that we think hold long-term promises for you. With this in-depth research and evaluation, you can focus on constructing a portfolio that aligns with your interests, financial capacity, and investment approach.
The principles that you have to follow are actually quite simple. This is what we call the "Value Research Way."
Invest in at least 20 to 30 stocks that we recommend. Diversification continues to be the foundation of a thoughtfully designed portfolio. Relying on a limited selection of stocks, regardless of their quality, is ineffective. Begin with our "Best Buys" stocks and gradually expand your portfolio.
Plan on holding any stock for many years. The term "many" may seem vague, but it is fundamental to our investment approach. If you don't require the funds and the business remains sound, there's no need to sell stock. We don't subscribe to the target price strategy, where investors sell a stock once a specific price goal is reached. A quality stock doesn't have a time or price constraint.
Don't stop - regular investing creates wealth. Invest consistently, preferably every month. There may be periods when new investments are not viable, but a long-term investor's default mode should be to invest - this regular investment, over time, results in significant growth throughout the years.
Keep your winners. A common mistake investors make is adopting the "profit booking" mindset. This tempts them to sell their top-performing stocks rather than allowing them to continue generating returns.
Those are the dos, and here are the don'ts.
Stocks are great, but not for all your money. Most Indians avoid stocks, but those who do sometimes over-invest. Don't do that. Money that you anticipate needing within the next two to four years should be allocated to fixed-income avenues, such as suitable mutual funds. Fundamental personal finance controls, like having sufficient insurance and emergency savings, remain crucial regardless of your proficiency in equity investing.
Ignore short-term gains and losses. Stock prices constantly fluctuate, occasionally experiencing significant shifts. Constantly monitoring your gains and losses can be detrimental. Remember, your investment journey is not about just a few months or even one or two years. No matter how well you choose, some stocks will lose money.
These are the dos and don'ts that add up to our investing approach. Or rather, what we hope will be YOUR approach, aided and accompanied by Value Research Stock Advisor.
Let's take a look at what you will actually get:
- Access to all our (currently 57) stock picks.
- Best Buy Stocks: 14 stocks selected from our recommendations. Use this set to start building your portfolio right away!
- The complete investment thesis for all recommended stocks is provided so that you understand why you are investing.
- New recommendations as soon as they are released.
- Continuous updates and analysis on all recommended stocks straight from our dedicated analyst team.
- Tools and data to research and analyse any other stock.
To start right away, head over to Value Research Stock Advisor, read the details, and become a member. Currently, there are 40 to 60 per cent discounts on the full membership price, so don't miss the opportunity.
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