In 2023, one didn’t have to do much for their investments to have made decent returns at the end but 2024 promises to be different. Vidya Bala tells you how to navigate.
This is the second in our 2-part series on managing your portfolio when you near your goal. In this second and concluding part, we shall answer if you should have equity in your portfolio, especially in your retirement.
Lofty return expectations can set you up for some rude shocks! Find out how to set your return expectations right in this article.
Some of the common questions we are asked when people near their goals are:
• How close to the goal should I start moving out of equity?
• Should I move out of equity entirely?
• Should I move out by selling lumpsum or should I do a STP/SWP?
• Should I move to debt funds or fixed deposits?
• If I leave some money and move out of only some funds, which category of funds should I move out of?
Some sectors like financial services face a lot of risks from external factors but we have a financial stock where we think the reward is commensurate with the risk and so we are issuing a BUY call.
We are adding this secured, listed NCD with attractive yields that compensate for the risk which is also mitigated by other factors.
While this sector is currently in a consolidation zone, it’s a good time to begin loading up as factors for a recovery are starting to line up.
When a company, especially an MNC, discloses little by way of scheduled earnings calls or business information, save for its AGM, its stock price can also react only to earnings or move on visibility in prospects of the company. We took that risk in one such company which is in the business of automation, in late 2021.
If you are new to mutual fund investing, it ta¬kes a while before you can come to terms with the multitude of terms used to showcase mutual fund returns. There is, for example, absolute returns, annualized returns, CAGR, IRR and so on. And to top it, folks like us keep talking to you about rolling returns and chide you for looking at trailing returns (or point-to-point returns)
Mid and small-cap funds form a part of a long-term portfolio to boost overall portfolio returns. But there are times when these market-cap segments underperform for various reasons. The small-cap index spent much of nearly two years languishing behind the Nifty 50. This is now changing, serving up a good opportunity to focus on the small-cap segment.
Last week, we made a quiet note about SEBI’s consultation paper on mutual funds in the PrimeInvestor Community. A consultation paper solicits opinion from the public on proposals mooted by the regulator, along with rationale for such proposals. Do note that these are proposals and have not been implemented.
Getting into a sector when the going is rough can pay off as kinks get ironed out and prospects look up. The complexity of this sector, along with other factors, has led to steep underperformance against the Nifty 50. But with more clarity now emerging on sustainable growth from here as well as a shift in the contours of the sector, this may be an opportune time to build up exposure to this beaten-down sector.
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