80-20


The Pareto principle (also known as the 80-20 rule,the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes.

The original observation was in connection with income and wealth. Pareto noticed that 80% of Italy's wealth was owned by 20% of the population. He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied.

The rule also holds true in software development, sales and marketing and personal life even. This Rule holds true in my financial portfolio even, out of my total investment in Equity market I have generated handsome profits from only 20% of the scripts. 20% of my scripts eat up my 80% of the total investments and 20% of the scripts that are trading below my purchase price are accounting to my 80% loss.

Nobody has invested in the market and always emerged in a profitable position, you need to give time to the scripts and patiently watch them moving. But the conclusion here is whatever you invest 80-20 rule always get applied


20% of your portfolio gives you 80% of profit or vice versa

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