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Dhwani Mehta made post

Why is it important to stick to my magic formula, which is my very own?

Answer
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Ayushi Kampani answered.
2 years ago


First and foremost, it suits your personality and fits into your scheme of thinking as an investor. A defensive strategy for an aggressive trader does not work, and vice-versa. A magic formula is one that fits into your trading style and your personality. Hence it fits seamlessly and works for you in majority of the cases.

You are more comfortable with a known devil rather than having an unknown angel. A magic formula is your known devil. It may have its shortcomings but it has worked for you perfectly in the past. Be clear about the contours of your magic formula and write it down on a piece of paper.

Your magic formula is not just about your formula but also how you think and strategic in response to various stimuli. Your portfolio performance is not just a function of your strategy but also your response to changing dynamics. A magic formula is that which best captures your ability to respond to market stimulus. Probably, why it is successful for you! Your magic formula should be designed to beat the market and withstand market shocks along the way. That is the key to your magic formula.