It is natural for investors to always want to be on the winning side. So, in the stock market, we crave to own the stock winners and market leading sectoral themes all the time.
Achieving that should effectively translate into higher investment returns. But, for that to happen, an investor must be able to invest ahead of others, anticipating their future outperformance. Most investors who made significant returns in high-quality stocks in 2019 were early believers who bought them and held them for reasonable time periods. The returns of those who bought them late in 2019, may not exactly be flattering.
This once again brings us to the importance of buying early and holding on. While buying quality is critical, overpaying is avoidable. Investors should brace themselves for a year when performance of quality is muted and the market sees outlier stocks coming up from the most unexpected sectors.