Holding on

I sold equities worth about 4.7 lakhs on Friday, in the process realising a pre-tax gain of about 2.2 lakhs on an investment of 2.5 lakhs. This cumulates to an absoulte return of 88% in a 8-month period and an annualised 132% return. Of the stock, two stocks had risen by 200% while one stock gave a 300% return of the investment.

Interestingly, it brings me to the subject of holding onto stocks. This is perhaps the first time, I've actually cashed-in on my buys by being patient and not selling off the stocks at a frantic 50% rise. There's much more to be made on holding onto stocks.

I now plan to re-invest these 5 odd lakh rupees in a chunks of 40,000 rupees in 8 different stocks while the rest of the monies will be in parked in cash and liquid investments (in a 50:50 ratio). In essence, we'll now work like a small PE firm with a holding period of 4-5 years on every stock. The target annualised yield at the end of 5 yrs will be about 30%. The 5 lakh rupees would thus have risen to 18 lakhs.