Part 4: Strategy or How the heck do I get to Financial Freedom?

4.12 Invest in Equity in a way that ensures your success today and, in the future


It all boils down to investing in equity successfully, so how do you ensure that? How do you take informed investing decisions and improve upon them with time? How do you prevent your emotions from hijacking your decisions? How do you take your equity investing to the next level? 
 
How do you choose the Investing Process let alone a System that is suitable for you? And how do you with limited knowledge of investing in equity improve on it. Is it possible? Let’s find out. 
 
First you need to know what exactly do you do when you invest in equity? You make these decisions:
  1. Which stocks or Fund to buy?
  2. At what price or NAV? 
  3. How much? 
  4. At what price/NAV to sell it? 
And then act on it. In short, build and manage your equity portfolio to achieve the desired returns. 
 
Now, can you know in advance, with certainly which stocks/MF will deliver your targeted CAGR? You cannot, no one can.  Then how can you judge? Good question. This sounds like a problem faced by people working in the corporate world at least the good ones, who hold one another accountable and responsible for meeting their targets and goals, despite not knowing how things will pan out in the course of the year?  How do they handle this and can we do the same for investing? 
 

Essentially, they follow the PDCA : Plan-Do-Check-Act Process or Cycle. How does this work? 

 
 
First, they agree to a plan of action, then do the actions as per the plan, check what results they have got and whether it is in line with what was expected or not, in short how well it worked. Then, and this is the game changer, they reflect on why the results were not up to the expectations and what is required to get there. It could be a better implementation of the plan itself, maybe some skill improvement or a better...........Read More

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