nitinku5021a's Portfolio

#41
Update

Debt Fund : 66.6% of Net portfolio

1) HDFC short term opportunity fund (G) : 90%
2) HDFC High Interest fund-short term (G): 10%

Equity : Index fund :5.5%

1) HDFC Index fund (Nifty Plan)

Fixed Deposit(Various Bank) : 27.5%

All fixed for 1 year max.

Current portfolio situation:

1) Debt Fund : 9.45% return PA

2) Equity : -2.6% PA

3) FD : 9% PA

Waiting for right time to enter equity.
 
#42
Waiting for right time to enter equity.
Timing an entry into equities is perhaps the hardest of all tasks.

While there are managers like Peter Lynch who advocated remaining fully invested at all times, there are others who have played market volatility well.

However, as shown from past. Huge gains are made in a few select days which occurs over a span of maybe years.

Here's a nice interview of Peter Lynch.

QS:The high and the low analysis.

ANS:People spend all this time trying to figure out "What time of the year should I make an investment? When should I invest?" And it's such a waste of time. It's so futile. I did a great study, it's an amazing exercise. In the 30 years, 1965 to 1995, if you had invested a thousand dollars, you had incredible good luck, you invested a the low of the year, you picked the low day of the year, you put your thousand dollars in, your return would have been 11.7 compounded. Now some poor unlucky soul, the Jackie Gleason of the world, put in the high of the year. He or she picked the high of the year, put their thousand dollars in at the peak every single time, miserable record, 30 years in a row, picked the high of the year. Their return was 10.6 That's the only difference between the high of the year and the low of the year. Some other person put in the first day of the year, their return was 11.0. I mean the odds of that are very little, but people spend an unbelievable amount of mental energy trying to pick what the market's going to do, what time of the year to buy it. It's just not worth it.


QS:So they just buy and hold?

ANS:They should buy, hold, and when the market goes down, add to it. Every time the market goes down 10 percent, you add to it, you'd be much -- you would have better return than the average of 11 percent, if you believe in it, if it's money you're not worried about. As the market starts going down, you say, "Oh, it'll be fine. It'll be predictable." When it starts going down and people get laid off, a friend of yours, loses their job or a company has 10,000 employees and they lay off two. The other 998,000 people start to worry or somebody says their house price just went down, these are little thoughts that start to creep to the front of your brain. And they're the back of your brain. And human nature hasn't changed much in 5,000 years. There's this thing of greed versus fear. The market's going up, you're not worried. All of a sudden it starts going down and you start saying, "I remember my uncle told me, you know, somebody lost it all in the Depression. People were jumping out of windows. They were selling pencils and apples." It must have been a great decade to buy a pencil or an apple, but they were always -- there must have been everybody selling pencils. That start to -- we laugh about it. People start to think about these things with the market going down. These ugly thoughts start coming into the picture. Gotta get 'em out. You have to wipe those out and you -- you either believe in it or you don't.
Also the choice of stocks is much more critical than the time of entry.

In the long run, a portfolio of well-chosen stocks and/or equity mutual funds will always outperform a portfolio of bonds or a money-market account. In the long run, a portfolio of poorly chosen stocks won't outperform the money left under the mattress.
Peter Lynch
 
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#45
Timing an entry into equities is perhaps the hardest of all tasks.

While there are managers like Peter Lynch who advocated remaining fully invested at all times, there are others who have played market volatility well.

However, as shown from past. Huge gains are made in a few select days which occurs over a span of maybe years.

Here's a nice interview of Peter Lynch.



Also the choice of stocks is much more critical than the time of entry.
Appreciate you post. Right time means, the level where I comfortable entering into equity market. It has nothing to do with perfect timing or something like that.

I am not comfortable entering at this level. I may not get the level which I want at all, But I am okay with that.

Yes you are correct in saying that the right stock is the key. I am keeping an eye on few stocks and will enter at a comfortable level.

I am not following very aggressive strategy while it comes to investing.
 
#46
Okay, felt like I need to update my strategy which I had stated in my first post:

I am concerned only about my Portfolio return here, hence the overall financial planning is not going to be a part of my posts.

So even if my portfolio since my first post has become 3X from X, the actual portfolio return was just around 15% P.A. while the Sensex had given much better return in that period.

With work taking most of my time, I am not much active on the F&O trading front. Currently I am on the capital protection mode and will soon start with creating investment portfolio (Again, I am very flexible in selling my shares without blinking my eyelid when I feel uncomfortable with the price or company). Hence, please read the "investment" word carefully. When I say investment here, I will only choose quality company whose business I understand and have little faith on the management.

Okay, With lots of disclaimers, I will appreciate your opinion/informations (If any) on the stocks I am tracking

I am currently tracking:

1) State Bank of India : Banking is the most boring and dull business but a business which any kid in the block can understand. The business is very sound and SBI, as a particular has much advantage over other Banks (Remember all the Defence/Government/PPF etc. money is with SBI i.e. low cost of capital and many more reasons)

2) HDFC : Well I like the Home loan business from the investor perspective. But with the kind of bubble in Real Estate ( don't beat me I have hurt your sentiments :smile:) , The chance of NPA is there with this scrip.

3) Tata Steel : We can discuss more on this -> why Steel will always be there and gold won't be

4) Titan : I like the turn around of this company in the last couple of years. Need to study more.

Rest I will update in the coming days.

NK
 
#47
Appreciate you post. Right time means, the level where I comfortable entering into equity market. It has nothing to do with perfect timing or something like that.

I am not comfortable entering at this level. I may not get the level which I want at all, But I am okay with that.

Yes you are correct in saying that the right stock is the key. I am keeping an eye on few stocks and will enter at a comfortable level.

I am not following very aggressive strategy while it comes to investing.
Okay, I missed to write the point on the reply above:

When Peter Lynch says the return has not much deviation with the timing, he says with respect to 30 years of time. Agreed that if the time horizon is so long, it doesn't matter at what point of time you buy or sell. It only starts bothering when you see it with 5 years of time frame.
 
#48
Few Changes in the reporting:

Starting July, 2012 I peg my portfolio @ 100

100.00% July
107.35% August
112.94% September
127.17% October
133.51% November
140.54% December
148.54% January
151.91% February
152.46% March

Current Portfolio Structure:

Debt / Fixed Income : 89.8%
Equity:10.2%

Debt/Fixed Income constitute of
1) HDFC Short term Opp. Fund
2) HDFC High Interest Fund
3) NCD of (Religare and IDFC)

Equity Holding:
1) CARE Stock : Currently @ loss
2) HDFC Midcap Opp
3) HDFC Tax Saver

Returns:

Not yet calculated.
but from the numbers it looks like:
Equity is in Red.
Debt return has also come down to around 8%.
 
#49
97% in Debt fund.

Last 1 year return was : ~ 8.5%

Equity: 3% => will further reduce to 1% by April.

Recent changes: Shift from very short duration debt fund to Long duration (Avg. 8 years) debt fund, with investment period till May, 2017.

Not much transaction / changes.
 
#50
97% in Debt fund.

Last 1 year return was : ~ 8.5%

Equity: 3% => will further reduce to 1% by April.

Recent changes: Shift from very short duration debt fund to Long duration (Avg. 8 years) debt fund, with investment period till May, 2017.

Not much transaction / changes.
I don't know about your goals, but this is not a good asset allocation for any portfolio.

Also, always consider post-tax for the true picture, I can only imagine how post tax debt returns with 97% allocation would look like.
 
#51
I don't know about your goals, but this is not a good asset allocation for any portfolio.

Also, always consider post-tax for the true picture, I can only imagine how post tax debt returns with 97% allocation would look like.
I am in the distribution phase of my portfolio. Debt funds give me the most tax efficient means to earn the interest.

Having said that, In my mind, the right allocation is 75% equity and 25% bond, which can go upto 95% of equity if something like 2008 happens. I can wait for years to get my comfortable state in order to enter into equity again. I had got out just before 2008 crisis. Never entered again due to other commitment.

97% in Debt fund.

Last 1 year return was : ~ 8.5%

Equity: 3% => will further reduce to 1% by April.

Recent changes: Shift from very short duration debt fund to Long duration (Avg. 8 years) debt fund, with investment period till May, 2017.

Not much transaction / changes.
Took the calculated risk ( Hindsight looks stupid move) to play with duration. Gulped the slap by Mr. market with all the humility and now back to very short duration after losing around 200 bps. With this my portfolio now looks like:
1 year return down to : ~6.5%
Equity: ~ 2% of the overall portfolio (reduced from 3%)
No more changes expected in near term unless something dramatic happens.
 
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#52
I am in the distribution phase of my portfolio. Debt funds give me the most tax efficient means to earn the interest.
Interesting !

With growing longevity and inflation in India, things can go wrong very quickly with only debt. Always have a moderate amount of equity otherwise you will lose purchasing power very fast.

I am sure you must have exhausted all secured debt options before going to debt funds. Also consider Liquid BEES and other ETFs for balanced allocation.

Nifty ETFs are safest and lowest cost option for equity participation.
 
#53
Interesting !

With growing longevity and inflation in India, things can go wrong very quickly with only debt. Always have a moderate amount of equity otherwise you will lose purchasing power very fast.

I am sure you must have exhausted all secured debt options before going to debt funds. Also consider Liquid BEES and other ETFs for balanced allocation.

Nifty ETFs are safest and lowest cost option for equity participation.
Yes. Longevity and inflation are the two key factors due to which I am not taking a vacation yet ;). Thanks for the information. I purposefully avoided most direct debt options because of liquidity factor. Liquidity is important for me since I intend to go heavy on equity but will wait for right time. That right time may take a while I guess.

ETFs are excellent option and I am keeping my options open to that too. Can you explain a bit more on Liquid Bees?
 
#54
ETFs are excellent option and I am keeping my options open to that too. Can you explain a bit more on Liquid Bees?
For people who have difficulty sitting on cash, Liquid BEES is a good option to park all surplus cash from the demat account itself and switch to equity anytime with minimum hassles. It would earn you 5-6% on the liquid portion yet have all cash ready for stock investments.

You can read more about the scheme here

Liquid Bees ETF Explained
 
#55
For people who have difficulty sitting on cash, Liquid BEES is a good option to park all surplus cash from the demat account itself and switch to equity anytime with minimum hassles. It would earn you 5-6% on the liquid portion yet have all cash ready for stock investments.

You can read more about the scheme here

Liquid Bees ETF Explained
Thanks. Had checked out. With brokerage included, the return would be lower, wouldn't be?
 
#56
Thanks. Had checked out. With brokerage included, the return would be lower, wouldn't be?
Most brokers do not charge a brokerage for liquid BEES and there is no STT either. However do remember this is more of a cash parking tool, to wait for better opportunities to re-invest. So that you don't stare at the cash and jump on for the sake of action.

From time to time, take out the cash for debt allocation as needed and invest in good debt funds and NCDs.
 
#57
Most brokers do not charge a brokerage for liquid BEES and there is no STT either. However do remember this is more of a cash parking tool, to wait for better opportunities to re-invest. So that you don't stare at the cash and jump on for the sake of action.

From time to time, take out the cash for debt allocation as needed and invest in good debt funds and NCDs.
Thanks for the info. Will use this.
 
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