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Portfolios

Portfolio​

  • Equity
    • Domestic
      • Nifty50 (30%)
      • Nifty Next 50 (70%)
    • International
      • Technology - NASDAQ
      • S&P500
  • Debt
    • FD
    • RD
    • PPF (1,50,000)
    • NPS
    • Liquid funds
    • Long Term Bonds
    • Cash (2,00,000)
  • Gold
    • Soverign Gold Bond - SGB
    • Gold ETF
  • Property
    • REITs
  • P2P
  • Trading
    • IPOs
    • ESG (To borrow Winston Churchill's words, ESG is "a riddle, wrapped in a mystery, inside an enigma.")
    • Day trader

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Asset Allocation​

  • Strategic asset allocation
  • Tactical asset allocation
  • Dynamic asset allocation

Top Asset Allocation Strategies for Financial Freedom - The 1% News

Modern Portfolio Theory​

https://www.investopedia.com/terms/m/modernportfoliotheory.asp

https://en.wikipedia.org/wiki/Modern_portfolio_theory

Permanent Portfolio​

  • Stocks(25%) When the markets do well. Direct equity or mutual funds. Even an index fund should do.
  • Cash(25%) during a recession. For example a liquid fund
  • Gold(25%) during inflation
  • Long Term Bonds(25%) during deflation and prosperity

Invest half the Indian equity investment in index funds (Nifty50 and Nifty Next50 with 75:25 allocation) and the remaining equally in 3 to 4 multicap funds managed by fund managers with a proven track record of over ten years. Up to 20% of the equity portfolio can be kept in foreign equity index funds

Young professional investors should allocate around 70% of their investable amount in Equity, 20% in Precious metals, and the rest in Fixed income investments. A retired person could invest 80 percent of his saving in fixed income, 10 percent in equity markets and 10 percent in precious metals.

Goal based portfolio investment​

How to get started?

  • If you can invest Rs. 3000 a month
  • Invest 1500 a month in equity and 1500 in fixed income

What are the next steps?

  • Track your portfolio once a month
  • Learn to study portfolio volatility, impact of asset allocation, rebalancing and diversification
  • Redo financial planning calculation with de-risking strategy

How to choose a financial product?

  • It should be liquid
  • It should have the potential to provide a post-tax return close to what is necessay for a goal
  • Visible risks must be understood
  • Invisible risk must be appreciated
  • Risk: reward; taxation; liquidity

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Why am I investingChild's future
When do I need the money? (years)15
What is the current cost if I need the money now?5,00,000
By what rate will this cost increase each year?12%
What would be this cost after 25 years?27,36,783
What return can I expect from equity after tax?9%
How much equity should I initially have in my portfolio?50%
What return can I expect from fixed income (after tax)?6% PPF / Gilt MF?
What return can I initially expect from the full portfolio?7.5%
For the above annualised portfolio return how much should I invest each year?1,14,862
Where should I invest in equity?

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  • Freefincal Basics of Porfolio management

https://freefincal.com/can-i-use-these-two-index-funds-for-retirement-instead-of-nifty-nifty-next-50

  • Nifty next 50 (Nifty Blend 40:60 / 30:70) Mid cap - S&P 400 Mid Cap and maybe SENSEX also (Nifty50/NiftyNext50 - 70:30)
    • Nifty 100 equal weight (better returns, low risk)
    • Nifty 100 Low Vol 30

Good Portfolios​

  1. 5000 per month SIPs

    • ICICI Prudential Focused Bluechip Fund - Direct
    • Kotak Select Focus Fund - Regular
    • Mirae Asset Emerging Bluechip Fund - Regular
    • ABSL Pure Value Fund - Regular
    • Reliance Small Cap Fund - Direct

  2. 6 schemes with double digit annualised returns

    • Parag Parikh long term equity fund (12.89%)
    • Axis bluechip fund (10.93%)
    • iifl focused equity fund (10.92%)
    • Axis midcap fund (10.56%)
    • Mirae asset emerging bluechip fund (10.56%)
    • Canara robeco bluechip equity fund (10.42%)

3-bucket portfolio​

  • Bucket A: 3-years expenses and emergency funds: 10% savings bank account, 90% Short Term Debt mutual fund. Bucket total = 100%.
  • Bucket B: long term equity: 30% Nifty-50, 20% Nasdaq-100, 5% Commodities, 15% hybrid equity fund, 30% stocks. Bucket total = 100%.
  • Bucket C: long term, Govt backed debt

4 Fund Portfolio​

  1. Index Fund - Nifty50
  2. Index Fund - Midcap
  3. Bond Fund - Short-term, Medium-term, Bank/PSU
  4. Gold Fund - Gold Fund, Gold ETF

Savings​

  1. Equity-oriented Mutual funds (50%)

  2. Fixed Income (30%) - AAA-rated corporate bonds

  3. Gold (10%)

    • Sovereign gold bond scheme
    • Do not buy Sovereign Gold Bond for returns! What you "get" will depend on luck!

  4. Exchange-traded fund (Index ETF) (10%)

Always have 60-70% large cap regardless of age

  • If you are going to invest less than Rs. 10,000 a month in equity funds, just one fund will do

  • For people less than 25 lakh in equity mutual funds, I would recommend two mutual funds only

  • Above that and only above that, a third fund can be added to reduce concentration and performance risk

  • For a one-fund equity portfolio

    • Single aggressive hybrid fund or single large and midcap or single multi-cap fund with do

  • For a three-fund portfolio:

    • Combo 1 - Large-cap, Aggressive hybrid, mid-cap
    • Combo 2 - Large-cap, Mid-cap, Small-cap
    • Combo 3 - Aggressive hybrid, balanced advantage, mid-cap

The Core Satellite Strategy​

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Let us say, a market participant has a corpus of Rs.500,000/-. This corpus can be split into two unequal portions, for example the split can be 60 -- 40. The 60% of capital which is Rs.300,000/- can be invested for a long term period in fundamentally strong companies. This 60% of the investment makes up the core of the portfolio. One can expect the core portfolio to grow at a rate of at least 12% to 15% CAGR year on year basis.

The balance 40% of the amount, which is Rs.200,000/- can be utilized for active short term trading using Technical Analysis technique on equity, futures, and options. The Satellite portfolio can be expected to yield at least 10% to 12% absolute return on a yearly basis.

Term life insurance​

  • Annual Salary * 10
  • Only one exclusion
    • Suicide in 1 year or 2 years
    • honour death by accident
    • exclude death due to natural calamity or death due to war
  • Simple term insurance which will give 100% money to nominee
  • No other features/riders
  • Till age 50/60
  • Build wealth more than the insurance
  • Don't buy single pay policy

https://freefincal.com/re-assemble-step-3-buy-term-life-insurance

  • https://freefincal.com/what-you-need-to-know-before-buying-term-insurance
  • PNB met Life
    • Sum insured without tax detection
    • HLV (Human Life Value) - 9 crore
    • 35 years (till 60 years)
      • 5 crore - 46020
        • 39000
      • 3 crore - 27612 (incl tax)
        • 23400
      • 1 crore - 10974
        • 9300
    • 10 years
      • 1 cr - 7906
      • 3 cr - 19470
    • One time pay option
  • What will happen if I don't pay premium after certain age

  1. Term plan - ICICI Prudential iProtect Smart: Rs 50 lakh

  2. Health Insurance - ICICI Lombard Family Floater: Rs 3 lakh

https://joinditto.in

Tools​

Investment Frequency Calculator

Portfolios​