Initial wealth building strategies- 1

Hi there,

By this time, I believe, you would have understood what investing is and the principles behind it. You would have also started paper trading. Any investing method (value or growth) suggests holding your investments for a long term. But, how long is long term?  All those value picks may not create enormous wealth. Some may fail. So, how would you balance this? I would suggest the following method.

  • First, spread out your initial capital into 4 or 5 lots. You are going to invest only 1/5th of your capital in a particular company.
  • Secondly, Whenever you think there’s an opportunity, put 40%from that 1/5th you allocated. The balance 60% should preferably be invested in 3 equal shots so that you can utilize all the dips in prices and you also bring down the cost.
  • Invest with the intention of a 10-15% profit objective. Once you reach your profit objective, sell enough shares in the company to remove your initial investment and leave the profit there. This profit will remain invested for a long term.
  • Repeat steps 1-3 as you search for another company to trade for a 10-15% profit and plant the Remainder for the long term.
  • Keep repeating. By doing this, you Guard your investment principal at all costs and let your profits run .You will have a good portfolio of shares at the end.

Happy investing.

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