How I made 22% profit in less than 6 months
Asset: Equity -> Index Fund -> Nasdaq 100 (N100)
Strategy: Systematic Investment Plan (SIP)
Entry: Investing fixed amount of money every month into Nasdaq 100
Index
Target: Book Profit at 22%
Exit: No Exit Criteria
Details:
As you all know, I have a goal in place and my portfolio is well
diversified into,
- Equity
- Fixed Income
- Commodity
- Cash
I used to invest in this assets every month via SIP with full discipline.
Also during my investment journey I have created my very own strategy based
on my goal and risk apetite (related mostly with individual mindset)
and as per my strategy I continue my investment regularly and book profit
when my expected target is reached. Like most of us, I have also often
confused on when to book profit and I started to explore on it.
Warren Buffett likes to hold onto a company/stock forever, he is altogether
a master in his game and he plays it very well.
Each of them have their unique opinion about selling.
Keeping all this in mind, I have formed an unique strategy for my investment
journey.
In my case, I used to set a fixed target for each assets and whenever the
expected target reaches, I sell my total investments and re-invest the profit
earned into a separate account and continue to start my regular investment as
usual. By this way I let my profit to grow as long as it can - Compounding
Also I ensure I saved my capital invested by selling the total investment and
from next month onwards I continue my regular investment amount plus the
preserved older capital as well. I followed the same for Nasdaq 100
Nasdaq 100:
I started my SIP from Jan 2020 and continue every month, since the returns
started to increase and it reaches my target of 22.82% which is its historical
CAGR for the last 10 years and I sold it on 7th July 2020 as shown below,
But one problem with N100 ETF is it's not highly liquid, I often find only
less volume of transaction happening so which is something to keep in mind
during the investment journey.
I have re-invested my profit booked and will continue my SIP going forward.
Peace
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