Skip to main content

Ekadashi, Eid & Your Personal Finance – Core & Satellite Investment Strategy

Image
By

“Even the intelligent investor is likely to need considerable willpower to keep from following the CROWD.” – Benjamin Graham

Ekadashi or the 11th day of the fortnight of the Panchang (Hindu lunar calendar) is a very important day for many followers. They observe fast on this day and practice self control – physically as well as spiritually. This way they try to cleanse their mind and body every fortnight. Eid ul Adha is a festival of sacrifice. On this day followers are expected to sacrifice their most beloved possession as a gesture of gratitude towards God and in expectation of big reward that God will bestow upon them for the sacrifice.

Similarly when it comes to managing your personal finance, one needs to exercise lot of self control to keep away from the public emotions and the noise. Saving oneself from market noise does not mean to follow “Fill it, Shut it & Forget it” strategy, the tagline Hero Honda used to introduce its bikes. It is equally important to keep reviewing your portfolio periodically and check the investments that are not doing well or the investment that has served its purpose and need a change.

Core & Satellite Portfolio

When an investor embarks upon his or her investment journey, we always advise them to build wealth using a core portfolio created out of plain vanilla products. And once they have their core portfolio in place to meet their financial objective, then they can consider additionally building a satellite portfolio with their surplus funds comprising of a little complex investment products.

Plain vanilla products are the investment products that are easy to understand and require comparatively basic knowledge of investments. Like mutual fund schemes categorized based on their market capitalization based portfolio – Largecap, midcap, flexicap, multicap and smallcap.

Apart from these there are a bit complex investment products that require advance level of knowledge to deal with these products, for example PMS, AIF, P2P or thematic or sectoral mutual fund schemes.

Aditya Birla mutual fund and Kotak mutual fund have launched two such schemes that can be considered to be part of your satellite portfolio.

ABSL Quant Fund – The fund will invest in 40-50 stocks from large & midcap space chosen based on quant theme and following mix of growth, momentum and low volatility with a quality bias investment strategy. The stocks will be reasonably equal weighted with maximum weight not exceeding 5%. It will combine human insight with automation to remove the human bias and benefitting from human wisdom. Machine will maintain a discipline selling stock that hits the signals with no human bias.

Kotak Special Opportunities Fund – Many a times special investment opportunities arise in particular stock when it is available at much lesser price than its fair value. It could be due to regulatory changes or management policy like buyback or merger & acquisition or because of industry consolidation etc. for a layman investor it is difficult to understand the complexities of these situations and their long term impact on the stock price. So they shy away from such opportunities. This scheme aims to invest in companies benefitting from such special situations arising from company specific events, corporate restructuring, government policy or regulatory changes, technology disruptions or companies going through temporary but unique challenges.

Both the above schemes are available under New Fund Offer available upto 24th June 2024 and can be considered to be part of your satellite portfolio. Should you wish to know more or want to invest, please contact your InvestmentMitra or reply back to this message or write to contact@investmentmitra.com.

Thank you.

Happy Investing!                                                                                                                                       Team InvestmentMitra

 

Comments

Post a Comment

Popular posts from this blog

This Republic Day Write Your Own Financial Constitution

By
“Constitution is not mere a lawyer’s document, it is a vehicle of life and its spirit is always the spirit of Age” – BR Ambedkar A constitution primarily is a document that details the rights, obligations, privileges, duties and responsibilities of the people living within the corridors of, and leading that country. It details the rule of governance. Without a constitution it will be difficult to live like a civilised society. We would be living like in stone-age where “Might was Right” and jungle raj prevailed all over. Like a country, each individual should also have his or his family’s own financial constitution detailing various financial objectives and the process to achieve those financial objectives, rules that will govern the way its finances will be managed etc. This applies to all individuals without exception and is more popularly known as “Financial Plan”. Like a constitution your financial plan should have a Preamble and different schedules. Preamble -...
Post a Comment
Read more

Time or Timing – What is more important with Sensex @ 64K

By
  The Stock Market is the device to transfer wealth from the IMPATIENT to the PATIENT. After swinging in a range for almost one and half years, markets breached their previous peaks and are scaling new one now. Markets have risen by almost over 14% in last three months. Major reason for this sudden rise is the return of FIIs to the Indian stock markets following the fact that India is the fastest growing economy and growing over 6% despite covid, global economic slowdown and geo-political tensions. We invest for long term and everyone knows in the long run markets will go up irrespective of intermittent shocks like scams, dot-com bubble, Lehman crisis, covid or banking troubles in USA etc. Following picture depict the journey of Sensex over 40 years since its inception.   Source; www.thenwsmen.co.in The unfortunate part is we are more concerned about the short term movements of the markets. Every time there is sudden rise or fall in them market we are gripped more by f...
Post a Comment
Read more

On Cross Roads

By
“We cannot truly plan, because we do not understand the future- but this is not necessarily a bad news. We could plan while bearing in mind such limitations. It just take guts.”- Taleb:   Propounder of The Black Swan theory. Pessimism that set in March, still persists in our minds. In fact it has deepened with growing number of Covid cases being reported. The largest question ruling our minds today is - Shall we ever be able to overcome it…………..     and if yes by when and how? Have we ever wondered how have the Indian culture survived for so many thousands of years, how come so many Indians who were transported as labourers to many African and European countries centuries ago are now ruling the roost or how come most of the top 20 firms in the world have Indian heading them and so on……….. The only reason to above and many such questions is our “ Ability to Adapt ”. We are fast learner and very quickly adapt to new situation. Indians enjoys six different we...
3 comments
Read more

Markets Tumbling, Recovering – What to do??

By
Markets Tumbling, Recovering – What to do?? "The best time to plant a tree was 20 years ago. The second best time is now." - Chinese proverb. In times like present most people flock towards safety. Most do it because they don’t know how long this doomsday atmosphere will last, some even feeling like there will be No Tomorrow. But hunger for good returns on our investment never ceases. Kin Hubbard satires, "The safest way to double your money is to fold it over and put it in your pocket." On investment and earning good money from them, Warren Buffet – the legendary investor says, "If I buy a farm, I don't know whether there's going to be drought next year, but I know that there are not going to be 20 straight years of drought, and I know there's not going to be 20 straight years of great rainfall." It is a proven fact that no matter what, in long term best returns come from stock markets only. And as Seth Klarman says, “The stock mar...
1 comment
Read more

Have You Missed Boarding the Bus

By
  "The market does not trade upon what everybody knows, but upon what those with the best information can foresee" – William Hamilton Russia-Ukraine conflict had clouded the stock markets worldwide giving speculations to the talks like possibilities of third world war, Russia heading for deep financial crisis, energy crisis looming large over Europe etc. With Russia-Ukraine conflict seems getting settled and much to the pleasure of Russia – the Super Power, this has now become a non-player for the markets until some significant deviation happens from the present stance taken by all major countries of the world. Present is the world of instant. We want everything instant and so are our reactions. In the age of internetted social life, dissemination of information is highly fluid. And over 99% of these netizens have mastered the art of forwarding such information without verifying if it’s a news, noise or manipulated agenda of some interested parties.   Most economies in...
1 comment
Read more