My Investment Portfolio
Reading Benjamin Graham's "The Intelligent Investor" has significantly influenced my investment approach. Since starting my portfolio in 2021, I've applied Graham's value investing principles, achieving over 27% gains overall. I've learned valuable lessons from both making and losing money. Here, I share some of these insights and how they've guided my decisions in the market.
Investment vs Speculation
I learned that investment involves buying securities based on thorough analysis and a focus on long-term value, while speculation involves higher risk, often relying on market trends or short-term movements for quick profits.
Defensive vs Enterprising Investor
I learned that the defensive investor prioritizes safety and stability with a passive approach, focusing on high-quality, diversified investments, while the enterprising investor actively seeks higher returns through detailed research, higher risk tolerance, and hands-on management.
Emotional Discipline
I learned to maintain emotional control and avoid making investment decisions based on fear or greed, sticking to a well-researched investment strategy.
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Diversification
I learned that diversification is a key strategy to reduce risk by spreading investments across different asset classes, sectors, and regions. This approach helps protect my portfolio from significant losses if one investment underperforms, while still allowing for potential growth from other areas.
Bonds & ETFs
I learned that bonds and ETFs are essential tools for balancing risk in a portfolio. Bonds provide steady income and stability, especially during market downturns, while ETFs offer easy diversification across different sectors or asset classes. Together, they help create a more resilient portfolio with both growth potential and risk protection.
Risk Management
I learned that financial risk management involves using a margin of safety, diversification, and emotional discipline. By investing in undervalued assets, diversifying to reduce risk, and maintaining a long-term focus, I can make safer, more informed investment decisions.
Reading The Intelligent Investor by Benjamin Graham has fundamentally shaped my investment approach, particularly in the areas of diversification, risk management, and emotional discipline. I now prioritize spreading my portfolio across various asset classes like stocks, bonds, and ETFs to reduce exposure to any single risk, while regularly rebalancing to maintain alignment with my risk tolerance. Graham’s distinction between investment and speculation has helped me focus on long-term value, avoiding impulsive decisions based on market fluctuations, and herd behaviour. I blend the defensive and enterprising investor strategies by holding stable investments while selectively seeking new research opportunities. A clear emphasis on emotional discipline ensures that I stay focused on fundamentals rather than reacting to short-term noise, aiming for a balanced, long-term portfolio.