Your Money: A contrarian investor has to be courageous

financialexpress.com:

By Parthajit Kayal & Moinak Maiti

In the realm of investment, it is commonplace to succumb to herd mentality. However, genuine investment triumph hinges on distinguishing oneself from the crowd and adopting a contrarian mindset.

The contrarian mindset revolves around challenging established wisdom and scrutinising popular convictions. It involves seeking undervalued assets, pinpointing contrarian investment approaches, and displaying a willingness to undertake calculated risks when others hesitate. Here are pivotal principles to facilitate cultivation of a contrarian mindset in your investment strategy

This entails conducting personal research, scrutinising data, and formulating autonomous conclusions. Avoid relying solely on others’ opinions (especially investment tips available on the internet) or blindly trailing the herd. Challenge prevalent assumptions and delve deeper to unearth concealed opportunities.

Embracing a long-term perspective is paramount in contrarian investing. Look beyond fleeting market trends and zero in on the fundamental value of the assets. Patience and a willingness to retain investments over the long haul can yield substantial returns, given the irrationality of market sentiments.

Contrarian investing means when everyone’s buying, you are contemplating selling, and vice versa. This might entail investments in out-of-favour sectors or purchasing stocks experiencing temporary setbacks but grounded in solid fundamentals. Utilise data to identify global macro trends, market inefficiencies, contrarian indicators (bearish/bull bets).

Adopting a contrarian mindset does not equate to reckless risk-taking. Understand the risks tied to each investment and be ready to cut losses if necessary. Adequate