InvestorQ : How do I set my time frame in case of investment positions?
Sam Eswaran made post

How do I set my time frame in case of investment positions?

swati Bakhda answered.
3 years ago

Unlike a trading position, an investment call is taken for the long term. Here your focus should be to hold on to winners long enough. But again there are exceptions here too. As an investor, you do not just set a time frame of 2-3 years but you break up the target time frame into granular portions. So you will have a view that the stock will move up by 70% in 3 years subject to certain key developments in terms of profitability, growth and order book over the next couple of quarters. What if these developments do not materialize? That is when you need to take a call on revisiting your original thesis. Whether you are a trader or an investor, there is a time value to money and hence you need to treat time frames cautiously. When the stock has disappointed in its initial milestones, as well exit the stock and look to come back to the stock later. Long term shifts in the market also call for resetting your time frame. If you are long on a stock and the market P/E ratio is at 29, then it is time to revisit your time frame, as this is against historical patterns. In an investment you always need to take a call on whether you need to cut your losses or to hold on to your winning positions over a period of time. That makes all the difference to all your positions.