Radhika Gupta | Kalpen Parekh | multibaggers: Tweet Buster: Radhika Gupta’s 3 best investments; biggest reason for trading loss

As the Nifty inches towards its next milestone of 17,000, cheer has returned to the broader market with Nifty smallcap and midcap indices outperforming the benchmark index. However, analysts remain in favour of largecaps.

In this edition of Tweet Buster, we bring you the best of market gyaan and strategies from the world of 280 characters.

Beyond personal finance
Radhika Gupta of Edelweiss Mutual Fund shared a thread of three best investments she has made in her lifetime.

MF track records

Kalpen Parekh of DSP Mutual Fund said if one takes a 20-year track record, Indian equity funds have done very well and if he takes a 10-year track record, the US equity funds have done better. “Will this tell me what will work in the next 10 or 20 years : unlikely”.

Asset allocation

Parekh explained the beauty of asset allocation strategy with an example. The lowest 5-year return for stocks (Indian and global) and gold is – 4% while for bonds it is 1%. “The median: stocks & gold : ~ 12 to 13%, Bonds 6%. All in CAGR. When you mix all 4, the worst is +3% but the median remains 11.5%.”

How to catch a multibagger

PMS fund manager Shyam Sekhar said investors must set a ticket size for their largest holding. “Catch it early. Set the #PositionSizing & work on. Once you reach it, the wait for results begins. The stock will start performing over time. You need to do little or nothing. That’s how #Multibaggers like Titan happen.”

Averaging trick

Microcap hunter Ian Cassel said your largest positions should be the ones that are up the most – not the ones you’ve averaged down the most.

A stitch in time

Smallcap hunter Soumya Malani said the single biggest reason for big losses in trading is unwillingness to cut positions when you know it has gone wrong to avoid a small loss. “Remember, every big loss was once a small loss that wasn’t cut. Pay market small fees, learn the lesson and move on.”