Retirement Portfolio - 18 years away

Q&A: Questions & Answers Portfolio Q&A
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Hi All
I have been investing in equity last 8 years but only invest significant amount last 3 years. Earlier I invested only in real estate.
For kids education - I am investing in EPF, PPFAS Mutual fund and Nifty Next 50 regularly.
For my retirement building equity corpus. My return expectation is 12.5 XIRR. Appreciate if you review and provide feedback.

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You could try to reduce the 25 shares to a more manageable 15 shares portfolio. Also considering it is a retirement portfolio, you can give preference to more stable large caps. A market cap of more than 5000 Crores would automatically reduce a few of your shares. You have got excellent selection of large caps and at excellent price points. Therefore, I am not seeing any faults in your stock picks.

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As far as my own knowledge is concerned in last few years…I believe you have picked up all good companies… None of them has been an underperforming in near term…

I agree with above comment… Making the number of stocks less would help micromanaging the portfolio… List is too long at the moment

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Good set of stocks.
It would be good if you could outline your buy/sell/hold strategy for the long term
Writing it down helps to build conviction and you can come back later to check if you are following what you preached :slight_smile:
It would be good if you could also write down the thought process behind these stocks and why each f them qualify for the long term.
Some folks usually have a watchlist of stocks , do you intend to do so or are you happy with current stocks with no change in the future ?
What is the overall allocation for equity vs other instruments ?
Answering these questions to yourself might actually surprise you ( I was when I asked these to myself :slight_smile: )

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One suggestion focus on dividend yield after 18 years… TCS is a great choice

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Some basic questions, while EPF is for retirement, I see it not as part of your retirement portfolio but for children education…what is logic behind that and also you get EPF only when you retire and not when you need it for children education. Pls correct if wrong?

Also what percent of your total networth is your direct equity portfolio, Nifty next 50 and PPFAS? This would make us easier to understand risk profile and the choice of stocks you made.

Regarding your portfolio, as horizon is very long, would be good to have steady compounders which are market leaders and have best possible management and governance. Also business that you understand very well and very comfortable to hold and even add on upsides. Gradually delete all others. Thanks

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Good portfolio, well diversified. Just one thing ! Any reason for not having any big private bank?

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Thanks Guys, much appreciated for taking time to reply.
My answers on few comments.

  1. Reduce the number of stocks to 15 good large cap stocks since its long term portfolio.
    -My rationale is to pick few mid cap,small cap leaders in their category can grow in to largecap. Can i have 10 largecap and 5 mid/small cap?

  2. Provide Allocation to Equity and other assets to understand risk profile - here we go, I haven’t included my house and emergency fund in the list.

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I am thinking not to buy any real estate but buy only equity/debt products in next 5 years to balance my overall portfolio to 40% equity , 60% other liquid assets

Why I considered EPF for child education? Good point, That was mistake, thought can withdraw after 15 years :slight_smile: I reduce my Voluntary EPF and put in MF.
I am investing for kids education in mutual fund so I can rebalance to debt funds easily closer to the goal. I can achieve my desired education corpus with 10% CAGR comfortably. Any suggestion on great mix of mutual fund combination to invest 15+ year for kid education welcome

  1. Rationale on buying the stocks, i tried to add few.

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  1. Good point on hold only business I understand. Yes, agree.

  2. Why I don’t have big bank stocks - Banks high leverage business so something goes wrong bank go bust quickly especially banks lending money to companies.

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Talking about allotment in order of their weightage

Land(43%): Having the heighest weightage, I would recomment to focus on to generate cash flow, rather than just the capital gains from price appreciation.
I think you are focussing the least on your largest assest, the most modest way of saying this is, you have very poor capital allotment & return generation.
Depending on the location, I would go to develop housing/bazaar type rent on road side assets, to rent barren lands to MSME’s or the least go for tower allocation to generate consistent cash flow out of these fat cows!

Stock(23%): This area you are indeed managing well.

Farm Land(14%): Should definitely go for organic farming, or atleast use these herbicides for cattle farming & generate cash flow out of them

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Fair points :+1:
Land - It was rented to business as godown and then to plant nursery but during covid lockdown they vacated. I am trying to find new tenant but not easy at this time.
Agri farm land - I am working full-time so difficult to do farming.