- This topic has 11 replies, 11 voices, and was last updated 2 years, 10 months ago by Nitin Bhatia.
November 4, 2019 at 6:09 AM #207961
I started investing since 1 year, many times I had doubt regarding whetheter to focus on diversify our portfolio. the reason behind getting this doubt when I look some of the good quality stocks like wipro, bata, Infosys, pidilite, titan etc have given a great returns over a period of time, yet when I watch some of the great investors insist to diversify your portfolio.
is it better to focus on specific stocks by understanding their business model, studying fundamental & technical analysis or by diversifying our portfolio be on safer side of investment.
As warren buffet stated that he will never sell coco cola shares, like this by focussing on specific stocks can we generate high returns.
November 4, 2019 at 4:27 PM #208556
I think, we should diversify our portfolio as per our risk appetite. warren buffet also said that ” never put all eggs in one basket”,
November 6, 2019 at 6:17 PM #209624
If you could select quality stocks that will survive for long, you should go for focused approach. You have mentioned some quality stocks, are you sure they will survive long term? Do read their balance sheets. When you are focused its not bad but do need to be thorough of your choice. Is it actually quaity? That depends on you.
However if you unable to work through the process and not sure of, better to diversify. It will reduce your returns but also safeguard your portfolio.
November 9, 2019 at 4:14 PM #211480
i think definition of long term investor is difficult, but today if you get opportunity grab it and get benefit , but ofcourse in quality stock
May 22, 2020 at 2:50 PM #210741
Diversification sector wise is good option rather having single stock.Titan & infy can also fall like these days than portfolio impact will be less if diversify & long term will generate good average returns.
May 22, 2020 at 2:51 PM #210761
is it better stratergies to sell option covered calls before 1 month OTM & buy option calls ITM before 1 month for beginners?
May 22, 2020 at 3:00 PM #210780
Sir i think diversification is a better option as we can see from past that some of the nifty 50 companies shows bad performance. Best example is Tata Motors, After acquiring JLR its performance is steeply declining, with change in time and demand companies needs to upgrade their business model otherwise they can be like Nokia. And retail investors like us will never know that how transparent and clean are the accounts of a company like YES Bank. So it is better to diversify the portfolio.
May 22, 2020 at 3:00 PM #210804
It is a debatable/subjective question and also differs from person to person. It depends on lots of factors i.e. knowledge of stock market, risk appetite, time horizon etc. The lesser nos. of stocks in the portfolio give more returns and vice versa. If we are not to able to make focused portfolio, it is better to opt for Mutual Fund because MF has well diversified portfolio and a professional approach. A focused portfolio has not been more than 7-8 stocks or maximum 10 stocks but it needs lots of confidence and knowledge about stock market and rigorous stock selection process.
May 22, 2020 at 3:02 PM #210839
In my opinion it should be both, Diversify focused stocks… Diversified few Quality stocks is much better than huge diversified portfolio for good returns.
May 22, 2020 at 3:17 PM #212029
As my opinion, Everyone should create their own definition for “LONG TERM”.
My definition regarding “LONG TERM”:
1.Target wisely: Before investing only I decide the % of the return ( % should be realistic ) as per that stock strengths and weaknesses suggest in the technical set up and fundamental analysis. If your target of return successfully hugs you then again do all sort research, analysis regarding the stock to decide next target for return. If your analysis and research find still more worth and growth in that stock hold it. As per NITIN Sir said you should keep a stop loss even for profit. So, keep a stop loss for the next target of return.
Now, Coming to the diversification part watch this video of NITIN’s: https://www.youtube.com/watch?v=SuGU5niKawA
May 22, 2020 at 3:24 PM #213156
If one is having a primary job then it becomes difficult to track and understand a companies performance.
I find mutual funds better for long term (3 years +) and stocks for short term or trading
But again this what I felt taking into account my situation.
May 22, 2020 at 3:24 PM #215892
Bro , Warren Buffet’s avg. holding time for stocks is 03 months only , if ur stock/s appreciated to double in 2 months , what you will do ? btw diversification is always better.
May 23, 2020 at 12:20 AM #230139
It is mandatory to diversify portfolio . our moto should be earning money from stock market . for example recently index management is working so why we not earning money from these top 10 stocks . What thing is working now is important. We can hold any stock which is in uptrend why we not exiting when it will be entering to downtrend . No matter which stock is this our focus should only be on quality stocks which give consistent return.
- The topic ‘which option is better for long term investors, focus or diversification?’ is closed to new replies.