Portfolio Mentor

Dear Valued Members,
I am Yogesh, an airline pilot, and very new to direct equity. I have been on the sidelines for a while and have been reading about managing funds/investments. I was very close to investing in a PMS but was advised against it by a very senior forum member. I have a significant corpus to be invested and request you all to please guide me. I am looking for a mentor or an investment coach who can hand hold me. I have seen many colleagues in my profession who have squandered their wealth due to lack of financial education. I do not want to end up like them.I am grateful to you all and this forum for your inputs.

Hey Yogesh, if you don’t want to go through direct stock picking I advice you to go through Mutual Fund route. Now, Mutual fund and SIP is something that everyone knows about. But, for someone who has significant corpus on hand already, those things are not as useful.

So, I would rather advice you to go through STP route. Where your money gets transferred from debt funds to equity funds. To add another layer of complexity, you can use various flexible transfer plans which provide option of transferring more money from debt to equity when market dips.

HDFC has plan which provides buying of dip through (investment amount - market value) for specific amount of days.

Some AMCs provide the option of P/E based approach (Kotak/IDFC) where based on Index P/E, they transfer more money when Index is trading at lower multiples.

This is not the perfect thing to do. But, rather than investing lumpsump, it provides more stability. And rather than SIP, it gives you wider option where you can put more money as well as get more benefits from dips.

You can see this link to understand basics of Flexible STPs.

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Thank you Chaitanya for your reply. I will go through the link. I am also open to direct stock picking.

Don’t be greedy and don’t take help from anyone how has no skin in game.

Best is look for fund managers who have skin in the game - like PPFAS, HDFC MF who have invested their own money into the funds.
2ndly - just invest in Index funds and have 10 yrs horizon.

If you don’t have patience - calm down your greed / expectations and invest in debt funds managed by HDFC.

End of the day , you have to educate yourself as no one going to make you rich for a 1-2 % fee.

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What I am going to recommend below is purely out of my own investment experience. As a disclosure, I want to confirm that I am an individual long term investor. So my advise is purely my personal opinion/approach and you should always take informed decisions based your risk taking ability.

Yogesh,…Best thing is to do it on your own in a small way with few (max 10-15 stocks) good mix of Large, Mid and Small cap stocks. That way you would learn a lot during this journey. Of course, as a minimum I expect you should be familiar with how to read P&L statement and there is a lot of tutorial stuff online to learn that.

STEP 1: Assuming you do it yourself, then the first step in your investment journey should start with selecting a bunch (say 20-25) of high quality stocks within large, mid and small cap space in niche sectors with an aim that they would deliver min 15-20% kind of annual returns on your investment.

What is High quality stock ? For me they are the ones, who are market leaders (that includes any monopoly or duopoly for their product/service), high corporate governance, great management, consistent improvement in financials for last 5 years, ROE & ROCE over 20%, debt free or negligible debt and has plans to expand business.

What is a niche sector ? For me these are the sectors which has got all the tailwinds and would rule the world in the next 5-10 years.

Remember, it is important to ensure both in your stock selection (i.e. High quality stock + Niche sector)

STEP 2: Having selected the companies in the niche sectors, now you need to deep dive these companies further for their track record (at least last 5 years performance). Specifically pay attention to their revenue growth, profits, EPS, debt, dividends paid, promoters buying or selling their shares in open market, ROE, ROCE in the last 5 years. If the company has any FIIs, DIIs, MFs invested and the holdings are steady or increasing the stake year on year, then half of your work is done. Once you have done this, narrow down your list to top 10-15 stocks.

STEP 3: Now you have shortlisted top 10-15 stocks and ready for investment. However, mind that these so called top quality stocks do not come cheap, and the markets would always pay premium valuations well in advance in anticipation of consistent future growth. In short, these stocks will always trade expensive and does not see much correction in their prices. In such cases, you have 2 choices. Choice 1, to wait in side lines and wait for a big market crash (like those March 2020 kind) and then deploy your lumpsum funds, but only catch here is we do not know whether we would get that kind of deep correction again. Choice 2 (which I prefer) is deploying funds systematically into each stock on every 3-5% fall during normal market corrections. In short, in choice 2, do not deploy funds in lumpsum in any stock, follow SIP strategy as and when you see 3-5% fall in prices. Also, it is good to deploy few additional funds when the stock has meaningfully corrected and about to reach its major support price levels. It is also good to invest some funds when the stock is long consolidating in a price range. You will better understand this correction & consolidation phases, when you carefully look at the stock price chart of last 1 year.

So that is how I follow my 3 steps in any direct equity investment.


In case, you think following recommendation 1 is not your cup of coffee or you feel you can’t spare enough time to follow invested stocks, then best thing is to leave it to experts to handle for you. As few people have already mentioned various investment options such as MFs etc. Although I had never invested in PMSs, but one PMS which has clearly impressed me with their stock pickings and the PMS performance over the period is “Marcellus” PMS led by Saurabh Mukherjea. I like the stock picks in their Consistent Compounders PMS and Little Champs PMS. So, if you could afford them, it is an option for you.

Once again as a disclosure I have no investments in their PMS nor I am promoting them here.

As I mentioned my preference is always recommendation 1. :laughing:

Remember in stock market, never fall in love with stocks for life. Irrespective of recommendation 1 or 2, you should know when to exit from a stock/fund (ideally exit as soon as you sense the stock fundamentals / fund performance is getting worse).

Wish you all the best and I hope I am able to help with some direction. Cheers !!!

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Hi Yogesh

First and fore most thing here is how much time you wanted to stay invested in ? You have to ask this question to yourself first. Equity investing is all about amount of time in the market not timing the market (when to buy at what price )

First build your own framework first , this is the key. I will try to give some pointers

So once have clarity on the duration then I suggest the following

Divide the Capital into three baskets

Basket 1 : 50% of the capital (Lump Sump Investment )

Choose Index Funds (50% of this capital )

Nifty 50 and Nifty Next 50 (Choose a fund that has low expense ratio and less tracking error )

If want to take bit more risk then Parig Parakh fund is good one (as mentioned earlier they have skin in the game, so far I have seen they are the only ones who does investor calls as if like there are running a company who wants to conduct investor calls )

Invest 25% In US fund ( Example Motilal Oswal S&P Index Fund )
Invest 25% In China Fund ( There are some good recommendations on Tar’s portfolio - check the latest discussion on his thread )

Basket 2 : 40%

This money you pump in over a period of 12-18 months into the Basket 1 investments as SIP

Basket 3 : 10%

This money keep it and deploy in direct stocks

Overcome FOMO fear, read , re-read, learn and un-learn and re-learn, there are plenty of resources on VP and good Youtube channels , once read and understand businesses and you see the potentials and the valuations are right to enter then "Buy right companies and sit tight " . Don’t follow anyone, others entry prices, risk appetite , duration that they can hold, circle of competence are different.

I hope this helps!


Thank you Amit. I will begin with increasing my knowledge base with the amazing resources in this forum

Thank you Sameer , I will divide the corpus into 3 parts and use your suggestions to invest one part into direct equity.

Thank you Rafi. Your detailed explanation is of great help!

@YogeshP …you are welcome.

Someone has started a new thread on list of stocks and sectors more or less based on my selection criteria. Keep tracking this thread and it might help in identifying list of stocks in niche sectors.

Hi. Mr. Yogesh. It’s nice to know that you are exploring the options for investments.
I have been an investor for the last 7 years or so and I still believe there is so much more to learn as we all know that learning never ends in markets or in life for that matter.

In your case, because you already have a sizeable corpus, the goal would be to preserve wealth and a reasonable 8 to 10% kind of returns on your capital. In stock markets, generally only 2-3% of the people make money. This is the caveat here. Return of capital is more important than return on capital.

When it comes to capital preservation, you have to stick to large caps or large cap mutual funds whichever is convenient for you. Index funds are also a good option but then this is still at a nascent stage in India.

Many would argue that we have to invest when the markets are down and all that but it is not an easy task to do. So the best way to go about investing in equities is SIP. Bulk investments generally are a bad idea and can work only if one has enough money after the market crashes by like 50% or something which is next to impossible to do.

Investing in large cap stocks which offer reasonable 2 to 3% kinds of dividend yield would certainly give a CAGR of 10-12% comfortably without affecting your sleep on a daily basis.

Don’t fall into the trap of investing in small caps as it is only for the experts. We can find out some good small caps on our own but still we would not be able to hold on to them in tough times as I understand from my experience. Investors have lost a lot of money by investing in small caps without doing serious reasearch.

Of course allocation of 10% in Gold is absolutely mandatory as they say.

All the best for your investment ideas.

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The best advice will be for you to approach a fee only financial planner and get customized advice for your situation. Asset allocation trumps stock investing. Please focus on the goals and timeframe and that will help you in choosing the investment instruments.