I just did a post on “Long term capital loss” …here is the sequel. Many people think that Long term alone will cure all the ills of poor stock selection, stupid asset allocation, illogical lack of insurance, …etc. IT WILL NOT.

Long term is good if the compounding is positive, but cuts viciously if you have bought the wrong stock. If you bought Suzlon at Rs. 105 and you are still holding, it is the single act of foolishness to bring your portfolio down by a significant amount. IT WILL NOT.

If you bought GMR Infra at 80 and watched it go to 5, it means you did not know how to apply trailing stop loss. Happens due to poor understanding of risk, of averag”ing and refusing to listen to the market voice. This hurt too..

“My mother is in the ICU…Subra does it mean I should not sell my equities” – YES YOU IDIOT, you should have had medical insurance, top up insurance, cash on hand, cash in liquid mutual fund, bank fd, …removing from a long only equity portfolio is aka HARA-KIRI.

Success in one field becomes a big impediment to success in other fields. A lawyer I know shifted all his family money to Karvy – taking their wealth advisory service. Yes of course he has signed up for POA based portfolio management. He is a smart Attorney and can see 2019, but can’t see 2029 when he is likely to regret his decision. His family (Mom) knows nothing, but will never, ever, ever ask his son…end of story. He called me to “discuss” AFTER he had done this deed. To me it was 2 hours of fun, a blog post, some fees, and learning. No, I did not tell him it was a bad decision. Too late.

You have to sell for a goal – hey withdrawal from equity is just done to build some more stability to the portfolio (regularly), when there is a big boom (holiday in Singapore vs Holiday in Swiss Alps vs holiday in Himachal?)

Withdrawal from Equity should happen from a position of strength, not in desperation..

It should be used for funding an expensive impromptu vacation because the market gave you 40% return and you had a Rs. 5 crore equity portfolio which became Rs. 7 crores. Taking Rs. 25L for a vacation is a sure way of making your kids understand the value of the share market. Even in value investing, some growth stocks are allowed….