Investing is a long-term game, not looking for price targets or booking short-term gains
16-Sep-2023 •Mohammed Ekramul Haque
As the week comes to a close, the Sensex and Nifty hit their lifetime highs. The 30-share BSE Sensex rallied for the 11th straight day to close at 67,838.
What should you do?
At Value Research Stock Advisor, our aim is that you create wealth over a very long period of time.
We don't recommend stocks with a three to six-month or even one-year investment horizon.
We typically ask you to invest with at least a five-year timeframe in mind.
Many of our first recommendations are over six years old, and we remain bullish on their long-term wealth-creation prospects.
You will not find many other advisors who will tell you to do the same. Most of them chase momentum, go after putting up a good show in the short-term to attract new clients or sell the next hot stock. We do none of these.
We will never risk your money in hot stocks or even unproven small-caps (when markets fall as they always do, many of these hot stocks lose all of their investors' money). Nor do we obsess about short-term market outperformance to attract more subscribers.
What we do is to ask you to invest in high-quality established companies that are leaders in either small niches or are the market leaders by a wide margin, run well by competent and trustworthy management that can earn significantly higher returns over their cost of capital.
There is one secret ingredient - time in the investment.
Apart from the above conditions, it is often the time in the investment or how long you remain invested in exceptional companies that will determine how much money you make in your stocks.
Almost all of the investing greats have made the bulk of their fantastic investment gains from holding on to exceptional companies, not for years but for decades.
We aim to emulate their success strategies and, therefore, continue to be bullish on most of our initial recommendations made back in 2017.
So, as the markets hit new highs or crack on volatile days, you should sit still. Do nothing.
The movement of the markets does not impact the intrinsic (or actual) value of the companies in your portfolio.
What you should follow is the performance of your companies. We do that for you at Value Research Stock Advisor so that you don't have to work to decipher the results. If a company is performing well, you keep holding on to it.
There will be good days; there will be tough days.
The markets are celebrating the new peak today. Forgetting that just three days earlier, it was panicking over mid-caps and small-caps cracking 3 and 4 per cent, respectively.
In a note we sent you on September 12, we advised you to treat your stocks as long-term investments that will have to ride out many periods of market volatilities and declines just like they rose on bullish markets in the recent past.
"Continue doing what you do every day. Do not exit the market, remain calmly invested," we said.
Our advice to stay calm stands today as well.
We reiterate: do not make rash decisions about stocks in your portfolio based on market movements.
Pick companies from our recommendations and sit still. Do nothing. Let us do the worrying for you.
We work for you to analyse if you should keep buying particular stocks, hold on to them if there are fundamental or valuation concerns or even sell if the situation demands.
As of today, as the market scales new peaks, we ask you to remain invested, do not disturb your investments and let it grow.
Click here to subscribe to Value Research Stock Advisor.
Suggested read: The power of long-term investing