Mr. A was having Rs.2 Lacs and wanted to start Investment in Stocks. He wisely diversified his Investment in 20 Stocks i.e. Rs.10000 in each Stock.
Mr. A sold those Stocks time to time where he got Satisfatory Returns in Short Period of Time. He held Quality Stocks where returns were yet to come.
Mr. A re-invested the amount derived from sale of stocks, in New Quality Stocks as he was much aware about common saying that Power of Compounding is the 8th Wonder of the World.
Mr. A sold those Stocks which were not performing well in 1-2 months as per his expectation and invested that amount too in New Quality Stocks.
Mr. A felt very Happy & Satisfied for his decision to not trade in Futures, Options and Intraday as he had already burnt his fingers there.
Now Mr. A found himself able to grow his Investment with Diversification.
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