I wanted to understand how do you guys try to diversify your financial portfolio and how much percentage do you allocate to each of them leaving Equity/F&O.
Below are the options, if you can copy paste it in the reply and tell me the reason how much % and why do you allocate it to that instrument would be very helpful for me to learn. If there any more instruments you guys invest, would love to know about it as well
Gold - Physical / Soverign / Digital
Real estate - Residential / Commercial
PPF
FD - Bank / Corporate
Money back Policies and other different types of policies / LIC
Mutual Fund - Debt / Equity / Hybrid
National Pension scheme
SCSS for senior citizen
Annuity Plans and Post office saving scheme ( Senior Citizen)
Okay it’s hard to say if this would be a 100% answer to your question but here’s a structure of a portfolio that I manage
Let’s start with 100% about 30% is in Gsec which is then pledged and taken back as margins.
10% in corporate Bonds.
About 40% is in equity-related ETFs and some in shares.
And rest is maintained as cash for undervalued opportunities in the equity segment and some for options.
on the note, this is a portfolio that I came up with for someone aged about 50yrs and moderate to aggressive investment style And this is supposed to be more of a fund-like portfolio, not a portfolio to generate regular income but to focus more towards capital gains and wealth preservation.
There’s some money like 5-10% kept idle in the bank in the form of savings and FD to provide as a cushion or as people call it emergency fund
Insurance is Term plans no money back or annuity plans.
Nothing in NPS or SCSS or other schemes.
though, once portfolio designing style can be purely subjective and personally biased but would love to see how different people do it.
There is no fixed percentage , I allocate based upon opportunity i see .
Wealth preservation is quite important for me , so i was not allocating much money in equity before. Now after reaching certain level now I will be allocating more to Equity than any other instrument( offcource ) things may change based upon market conditions.
Money management in trading is simple , my position size is defined upon predefined risk per day. I usually plan over weekends my next week trading plan.
I am balance trader so my max risk reward is around 2% per week. Also, i do risk on off approach so try to make week green or else month green. SO , NOT LOSSING MUCH IS OVERALL PHILOSOPHY. With this only had 1-2 months at slight red or break even in last 24 months.
debt funds - 70% (mutual funds & gsecs)
real estate - 20% (cannot be really considered as a liquid asset)
FDs, treasuries, PPF, NPS - 5%
Equity - 3-4%
gold - less than 0.1%
cash & savings account emergency fund - rest.
I will rebalance debt to equity only if we have a time or price correction. Or if select stocks provide good bargain. Currently I have stopped all SIPs, will resume only when the current euphoria ends.
I used to invest in ELSS for tax saving purpose until last FY. From this FY won’t be investing in these as I will be switching to the new simpler tax regime. My surplus funds are in my trading account which am hoping to grow. Also I have invested in my personal ventures which am hoping will bear fruits.
Note that I can try out this mode because I have the basic and future contingency needs taken care of already.
@jkalathil thats a great answer and I too believe in simplicity is the key for success, on your point about being bearish in real estate, I have one view how I invest in Real estate, you may or may not agree and I understand it is very subjective also
We look at real estate from the point of view of the growth and infrastructure around it and not lock in big money.
Some property which we got in a very different locality is near Panvel in Navi Mumbai where the airport work hasn’t even started and didn’t invest more than 10 lakhs similarly in locations like Alibaug, GIFT and UP’s Noida few years back but always tried to put in smaller amounts but good infrastructure and have gotten some very decent returns which I could compare to equity obviously in the last 3 years there is nothing that can be compared to them but still very attractive. I think it is the way you invest understanding your risk profile and the timing is very important tbh
Trading Index / commodity / currency derivatives only (no stock investing or trading). 50% parked in liqudbees and pledged thanks to a nudge from @Jason_Castelino and because my current broker allows option buying with pledged margin.
As I am young and believe living in the present, I put majority of my savings on equity positional trades and it has worked well for me so far with good returns. To avoid overnight holding risk in future, I will be switching to Intraday trading with my good R:R algos soon. Long term wealth creation investments are secondary for my goal right now.
And this is supposed to be more of a fund-like portfolio, not a portfolio to generate regular income but to focus more towards capital gains and wealth preservation.
I’m actually bearish in real estates. That’s why i haven’t invested more in it. I’m kind of a more risk taking person.
