Hi friends,
A lot of valuepickr readers are new to the markets and have never built or managed their own portfolios just yet. It is a different ballgame when you are investing every month through your salary v/s having capital lump sum and being able to see returns from the start and measure returns accordingly.
The biggest mindset that needs to change with this, is it will be difficult to see returns outright as your purchase frequency and building up of capital will skew your return ratio. Here the strategy and style with which you want to invest in becomes even more important. Being confident in the company/MF you will keep on accumulating matters even more as there will be times when you would be averaging up.
The first 3 years of building a portfolio will involve capital purchases of higher than 40% of your existing portfolio. This will suppress your overall returns for a while due to the volume of investing and building a case. But what happens over time, is even though your contribution goes higher, your capital infusion would end up being 15% of the overall portfolio, and the returns (provided your strategy worked) will show results.
So while building any portfolio is a patient affair, it is especially true in case of salaried capital.
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I read your complete thread. From your latest thread I assume that you are working as a salaried person now and getting regular income hence you have elaborated on salary person’s investment mindset. Thanks for this. I am also in the same boat.
Kindly share your latest portfolio stocks as well as mutual funds. Also if you have rebuilt the two brothers portfolio after you sold it before covid in time…pls share your experience. Also if you could share some good sources/ books to develop portfolio buidling strategies. Thanks in advance.
Hi Mudit.
Yes, you are right, I’m indeed building up my own capital.
I will share my portfolio soon. In terms of building a portfolio, I believe in diversification in assets rather than diversification in equities. I’m not yet too confident about any real estate investment as a lot of the land dealings happen via cash, and great returns are made on land-based investments. Fixed income, gold(digital+physical), MF and Direct stocks is where my portfolio lies. When it comes to stocks I own usually under 10 companies and for MF I do plain index investment. I personally don’t like to do any 80C investments but one can look into those as part of book building. You can allocate how much of your portfolio you want to generate alpha and how much in terms of investments which are corollary to savings. This way set up an expectation of how much you want your overall portfolio return to be.
Resources I suppose there are better people than me who can suggest what to read, but you will have to think deeply and apply strategies to truly find your comfort with them.
Hope this helps
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Thanks for your guidance. Waiting for your portfolio .
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