But wouldn’t it be nice if you could give booster shots to your portfolio every couple of years? Wouldn’t it be great if you got an opportunity to buy shares of some great companies at reduced prices?
|Tata Motors – From Rs 26 to Rs 270 in just 20 months!!!|
If we were aware that markets available at PE multiples of 12 are grossly undervalued, we could have made a lot of money. 🙁 But past cannot be changed and future is still not here. So what should one do when markets correct? The first step would be to reassess your investment horizon. If you are among those who still prefer long term investing and are focused (like us) on safety of capital + dividend + atleast market matching returns, then it makes sense to buy stocks of companies that already exist in core of your portfolio (Check our ‘strangely named’ long term portfolio). This is assuming that you are sure that reason for which you bought these companies are still valid. And who wouldn’t like to buy cash-generating companies like ONGCs, Clariants & Balmer Lawries, etc at low prices?
|Portfolio structure & which type of stocks to buy on dips|
Disclosures: Long term positions in Clariant India, Balmer Lawrie, ONGC. No positions in Tata Motors