I have come up with a investment concept, VD's 40:30:30 Investment Concept as i call it. It is like this, at any point of time you want to invest in Stocks divide the money you have for investing in a ratio of 40:30:30. Invest 40 % money in stocks you want to buy. Keep remaining amount as it is, don't invest it. It is up to you whether you want to invest it for long term or short term. If the market goes down by 15-18% invest remaining 30% of money and if it further goes down by 15-18% invest the last 30 %. If after investing 30 % at any point of time market goes up you can sell your stock if you want and book profit thereby reducing loss from original 40% invested money and then you can again invest 30 % when market goes further down.
Now if the market goes up you can sell the stock to get profit and re-divide the total amount in 40:30 :30 ratio and invest it. Or you can keep the stocks and the amount which is left i.e. 60 % of total amount, you can redivide the amount in 40:30:30 ratio and invest it and keeping the existing stocks.
It is up to you to sell stock at whatever rate you want and book profit. You can use this principle if you don't want to keep stop loss. I feel by using this concept you can keep your portfolio away from heavy losses when market starts going down. You can also earn profit when market goes up and invest more with less risk with this concept. You can use this concept at any point, whether you are just starting to invest or you have been already investing.
I use this concept when i invest my money and it has been amazingly helpful to me during tough times. Moreover do strong market research before investing in any stock. The concept has worked with me and it is not necessary it works with everyone because it also depends on person to person and in scripts they invest. I feel this concept may lessen your risk in investing.
Disclaimer: This is only for information and the author is not liable for any losses be it direct, indirect, incidental, special or consequential damages caused by using the information, or as a result of the risks inherent in the stock market. No warranty or guarantee is given regarding the accuracy, reliability or completeness of the information provided here.
Now if the market goes up you can sell the stock to get profit and re-divide the total amount in 40:30 :30 ratio and invest it. Or you can keep the stocks and the amount which is left i.e. 60 % of total amount, you can redivide the amount in 40:30:30 ratio and invest it and keeping the existing stocks.
It is up to you to sell stock at whatever rate you want and book profit. You can use this principle if you don't want to keep stop loss. I feel by using this concept you can keep your portfolio away from heavy losses when market starts going down. You can also earn profit when market goes up and invest more with less risk with this concept. You can use this concept at any point, whether you are just starting to invest or you have been already investing.
I use this concept when i invest my money and it has been amazingly helpful to me during tough times. Moreover do strong market research before investing in any stock. The concept has worked with me and it is not necessary it works with everyone because it also depends on person to person and in scripts they invest. I feel this concept may lessen your risk in investing.
Disclaimer: This is only for information and the author is not liable for any losses be it direct, indirect, incidental, special or consequential damages caused by using the information, or as a result of the risks inherent in the stock market. No warranty or guarantee is given regarding the accuracy, reliability or completeness of the information provided here.
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