over four years of continuous learning about stock markets and testing different methodologies, I have finalized my portfolio of 20 companies. I wish to stick to it except for any dramatical changes in the economic scenario of india.
companies with >7 % of allocation
page industries, Havels india, Britannia, astral poly technik
companies with 5-7% allocation
eicher motors, pidillite, ttk prestige
companies with 3-6% allocation
sundram fastners, solar indus, security & intelligence services, minda indus, dmart, amber ent, asian paints, bajaj fin serv, navin fluorine
tail enders (<3%)
adv enzyme,dixon tech, natco pharma, varroc engineering
I built my portfolio with the companies having strong and ever increasing cash flow since many years. Most of them are increasing continuously instead of sudden spikes for at least a decade. All are having good fundamentals. Unexpectedly I have finalized this list of A grade companies of rating agencies. I have tried to avoid cash sensitive (require large amounts cash for operation) companies.
I have not fixed percentage of allocation to any company. Depending on the performance of company (increase in share price) I will keep on adding some more shares. If I find some thing very potential candidate, I wish to add it without selling existing shares.
Why I have diversified?
I have frightened by the ongoing disturbances in companies due to lack of good management. I dont want to loose my capital and I want to limit the risk I am taking. My target is not to find multibaggers but to find the equities that can give good returns than any other asset class stably.
Why I wish to add the performing ones (even at high price) than the valued ones at low price?
If I buy valued ones I may have to wait for years. Any thing may happen meanwhile. If it wont perform due to unforeseen events, I will be depressed. But when I buy the performing companies, I always have the chance to sell my entire portfolio with in few days through out my lifetime with little risk. Ofcourse, I never wish to do. But it gives me peace of mind.
suggestions are invited from the experienced investors of this forum.