Investment Blog

People talk about their winners more than their losers.

Many times you hear people telling you they made a killing on one or two stocks. The reality could be that stock may be just 1% of the overall portfolio. Even doubling the stock price i.e. 100% return will add only 1% additional return to the portfolio.

It’s not about how one or two stocks or schemes in your portfolio performed but how your overall portfolio performed that gives a truer picture of gains achieved.

It’s also not about how the portfolio performed in the last few months but how it performed over the last 3-5 years. A portfolio going up 50% in one year and down 50% the following year leaves you with a net loss of 25%.

Everyone is playing a different game with their finances. You would never know the complete picture but would mostly hear about the positive outcomes. The risk profile and personal situation of your friend or even your own sibling would be different than yours.

Stick to your risk profile without getting influenced by the noise created in your social circle. One of the greatest powers in investing is the ability to think independently and rationally when everyone around you is losing their mind in greed or fear.

Your journey is unique and your portfolio should also be unique that suits your requirements on your personal journey.

For a detailed reading on social proof, please check Social Proof Investing.

Originally posted on LinkedIn: www.linkedin.com/sumitduseja