Lots of people recommend a lot of strategies to deal with stock markets. Some trade, some stay long, some rely on mutual funds and so on. I have been in the stock markets ever since i got Aztec stock options which was around 8 years ago. I consider myself a long term investor, pick my companies with care, read Annual reports carefully each year and stay invested if i am convinced. I know very little of valuation strategies and the various ratios that people talk about for stock selection.
I was pleasantly surprised when I clicked a button on moneycontrol.com(where I’d been tracking my portfolio for a while) to compare my portfolio with the stock indices . Since my portfolio was mostly large companies, I decided to compare it to BSE-100. It was sucky that i could compare only for an year and not longer than that.
Most mutual funds manager aim to beat the Index, and get big bucks for doing that. If this year is a decent benchmark then i should get the real big bucks, because I outperformed the Index by around 4 times. Simply put (assuming the same return for a while, which is totally hypothetical) i would double my money in 2.5 years while the Index (at the same rate) would take you 8.5 years.
Some of the best equity funds have returned around 20% this year, probably gold funds are the only funds that would have given you better results.
One reason i think is the fact that i stuck with my best bets and did not face liquidity crunch that other fund managers were facing. Also i was mostly in stocks even in the worst of the times.
Are your experiences the same? Have you seen your portfolio outperform Benchmarks? What are your strategies?
The comparison is here .