- Time Horizons
- Size of stock holdings in portfolio
But before we talk about importance of these two things, we will like to thank these channels for showing us the real beauty of stock markets!! (Don’t worry: the link takes you to Google search page, no malware or spamware would be installed on your device). 🙂
|Oh My God!|
So why are Time Horizons important? It’s because it helps in deciding whether we should be affected by daily price movements (& news) or not. For example, when Maruti had labor unrest in Manesar and stock was hovering around Rs 1000, it should not have affected an investor with time horizon of 10+ years. The labor problem was a short term blip and provided long term investors an opportunity to pick up a great stock at very cheap price. And as we later saw, Maruti ran up to 1500 in no time at all (i.e. 50% up in 3 months!).