I like to get your guidance on my following portfolio for long term
- HDFC Bank
- HDFC LIFE
- TCI EXPRESS
- LIC HOUSING
- UNITED SPIRITS
- ICICI M150 ETF
like to add into these when market corrects/crash. What your view
Etf will perform better than this, put your money in mid and small cap mutual funds if u play safe.
My view would be avoiding over allocation to any one stock. Many times our direct stock portfolio comprises the same stocks as our mutual fund portfolio, so diversification is very less. Now I practice few easy steps to avoid this overlapping -
Invest 40% in either a Large cap or an ETF which gives enough exposure to major stocks like Banks, Reliance, etc.
Invest 40%, divided between a Midcap,Smallcap Fund and 10% Debt mutual fund.
This is a bit difficult step and might contradict with my thesis of overlapping. Sometimes we come across companies which have greater prospects of growing. Their Earnings growth and Stock performance is better than the market, but in our mutual funds we cannot decide the allocation of our funds, hence we might miss on these opportunities. So the remaining 20% consists of direct stocks which you have conviction on. This might overlap with mutual fund investments but they will only generate an alpha over your mutual fund returns.
Hope this helps