Dreaming of turning a modest stock portfolio into Rs 10 crore? Chartered Accountant Nitin Kaushik says it’s possible – but only if investors abandon myths and embrace discipline, focus, and ruthless objectivity.
In a viral post, Kaushik stripped away the romance around stock market wealth creation, calling it “a game of conviction, not collection.”
“You don’t need 100 stocks – you need 10 right decisions, held long enough with conviction and discipline,” Kaushik said. “Wealth is built not by buying often, but by thinking deeply.”
Kaushik, known for his no-nonsense approach to financial strategy, outlined three rules for those seeking to build serious wealth through direct stock investing – a method that involves buying shares of individual companies rather than pooled products like mutual funds.
3 golden rules
Own around 12 quality stocks
Diversification, Kaushik explains, doesn’t mean owning dozens of companies. “Diversify, but don’t overdo it,” he said. “The best investors hold a handful of quality businesses they understand deeply. Beyond that, you’re just diluting returns.”
Exit fast if your thesis breaks
Loyalty, Kaushik insists, is for people – not stocks. “If your investment thesis doesn’t hold, get out. Don’t rationalize bad performance. Stocks don’t owe you anything.”
Track like a hawk
Successful direct investors must be obsessive about tracking their holdings. “Read quarterly results, listen to management calls, study balance sheets, and watch price action,” he said. “Markets reward those who do the homework.”
Direct stocks: high control, high responsibility
Unlike mutual funds – where a professional manager handles the research and execution – direct stock investing places all control (and responsibility) in the investor’s hands. The potential upside is higher returns, since investors can avoid fund management fees and pick winning companies early.
But the risks are equally significant. A single wrong bet can drag down the entire portfolio. “You’re exposed to company-specific risks – poor management, changing regulations, bad earnings – all of which can wipe out gains quickly,” Kaushik warned.
Building a robust direct stock portfolio also requires time, effort, and temperament. Investors need to analyze company fundamentals, assess business cycles, and diversify smartly across sectors to manage volatility.
Direct stocks vs mutual funds
Choosing between the two depends on your time, skill, and risk appetite. Direct stocks offer autonomy and the thrill of stock-picking but demand consistent research and vigilance. Mutual funds, on the other hand, offer professional management and diversification – ideal for those who prefer a hands-off approach.
Mutual funds spread risk across multiple companies and sectors, which cushions against individual stock crashes. However, they charge annual management fees and offer limited investor control over portfolio choices.
Kaushik emphasises that neither approach guarantees success. “The biggest myth is that stock market wealth comes from frequent trading. It comes from staying invested in a few right businesses through cycles of fear and greed,” he said.
The path to Rs 10 crore in equities isn’t paved with luck or tips – it’s built on clarity, patience, and data-driven conviction. As Kaushik puts it: “You don’t need to be right every time. You just need to be right big – a few times – and stay the course when you are.”