1) Invest in undervalued stocks
- Growth rate > 15%+ CAGR
- Trading below 200DMA
- If you are under 40, invest 70% of your capital in above strategy.
- Max 5% portfolio exposure to each stock.
- Alternate strategy:
- If you can invest in American markets, sell cash secured puts (CSP)
- Collect premiums
- Wait for assignment
- If the stock goes 10-15% above 200DMA, book at least 50% profits
- With that cash, sell CSPs
- Collect premiums
- Wait for assignment
If you can’t sell CSPs, move to other stocks. Expand your stock list.
What are CSPs? https://lnkd.in/dvJFe4U6
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Keep repeating this strategy. You are consistently investing in high growth firms at okay valuations.
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When portfolio goes above 2Cr+, withdraw 30%. Buy a hard asset (eg. Real Estate). It gives you safety.
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What derails this plan? Sudden market crashes.
What to do when market crash by 20%+?
- ** Go leverage (don’t hate me for saying this; this is what rich folks do; check what Adani, Ambani, Zuckerberg did in 2020 crash)
- Leverage is not bad: you need to know WHEN to take it
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Why leverage makes sense here? because markets these days exhibit a V shaped recovery. Rather than a slow decay like 2008.
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So as long as you are playing in your limits. And, not taking leverage too early, you would do exceptionally well.
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When portfolio hits 5Cr+, setup a tax base. Optimize for 0% capital gains 🙂
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With the taxes saved. Buy a golden visa, residency, travel and enjoy life.
How do I know all this? Because have done all this.
- You pay 0% commissions
- Are well diversified
- Paying close to 0% taxes
This takes time, effort and learning.
Challenge?
- It is deeply painful to learn new things.
- It is even more painful to do this consistently.
- You need to be extremely open minded.
Therefore, most people would simply read this post and move on. And, take no action.
