But let me explain this through a simple example:
Investor/ trader buys a stock of HUL as of 1st April 2008 at INR 238.
Now let’s talk about absolute returns
2009: -1% (Negligible Return)
2010: -3% (Traders exit, stock not performing well)
2011: 19% (Ohh, the stock reached above the cost price, so let’s exit.)
Short Term Investor: I have anyways earned more return than FD.
Hence more exits.
Here, Market is testing the investor's patience.
Traders and Short term investors exited the stock, Long Term Investors keep accumulating!
2012 : 72% Return
2013 : 98% Return
2018: 460% Return
2019: 608% Return
Long Term Investors Exit. Book Profits. Earned 8x times.
This is the power of Patience in the Market.
Be Patient and keep investing in good company stocks.
Would love to know your thoughts!
P.S: Trader doesn’t mean intraday players.