GARP Strategy is a wealth builder and compounder!

Market is on fire.

Novice investors buy stocks using their full funds without proper research. Greed is playing in full swing.

Unfortunately investors don’t know that it’s not good for them. Even in this dangerous phase, a simple strategy can help you to protect and grow your money.

If you adopt value or GARP investing you don’t have to worry much about any kind of market. 

The  advice offered by Buffett, is that investing is simple, but not easy. Even if we don’t know about value investing we can always buy stocks along with the promoters. Take for example som distilleries. When it was at ₹105,  promotors started to increase their stakes as though there is no tomorrow. The promoters increased their stakes from 15% to 35% in the last 2 years or so. Yet investors were panic driven as their limited knowledge prevented them to take advantage of the situation.

The reason investing is not easy is that it is difficult for most investors to control their emotions — emotions of greed and envy in bull markets and fear and panic in bear markets. In fact, bear markets are the mechanism that serves to transfer assets from those with weaker stomachs and without investment plans to those with stronger stomachs and well-thought-out plans.  That’s why JP morgan once quipped *"In a bear market, stocks return to their rightful owners" *.

Currently the volatility in Indian market is record low. Volatility becomes low when everyone is hugely bullish on the market. In fact when everyone is bullish we have to be careful as all are pushing the market to higher levels. We  can always shop around the market when all are bearish on the markets.

One way to plan for bear market is investing with strategy. Value investing is one of the good strategies as it allows you to buy equities when stocks are cheap and reminds you to sell when they become expensive. Adhering to a specific investment strategy helps us to understand the market cycles and prevents us from premature decisions. Investing with a plan is the key to success and hope you plan well before buying a stock.