- January 1, 2011
If you are new to the service and are looking at options on how to build your portfolio, please refer to this note .
If however you need assistance based on your personal situation, then you should contact a certified professional for it.
There are no perfect formulae or easy answer which will work for everyone. I can suggest an approach which I use.
I typically invest a portion of my monthly income into new ideas, keeping the total allocation in equities at a certain level. Let’s say that the equity holdings are 50% of my net worth and I want to keep it at the same level. I will typically invest 50% of my monthly savings in stocks. This is not a hard and fast rule and it is based on the kind of opportunities available at that time.
I will typically look at the current holding and if the position is less than a full sized position and the stock is at or below the buy price , I will add to that position till I achieve a full position size.
If i do not find any new attractive stocks, and do not want to add to the existing positions (to control risk), then i keep my income as cash or as a short term deposit.
I cannot recommend an absolute amount as what is a big amount for me, could be small for you. That said, I think if your investible amount is less than 4,00,000 and you don’t have a regular income coming in every month, please do not subscribe to this service as the cost of the service is around 2% of your investible amount which is quite high.
I will update the stock price only when i make a transaction (buy or sell). I have no plans of providing daily or weekly updates. The main reason for this decision is to avoid a short term bias. I have found, based on my personal experience, that frequent portfolio evalution causes one to focus on short term price fluctuations and make irrational decisions.
That said, i will personally track the portfolio on a regular basis and if i find that the price has dropped and the stock is now attractive, then i will publish a portfolio update and update the model portfolio table accordingly.
I will be updating the fair value of each stock on an annual basis or if something material occurs for the company, which causes the fair value to change considerably.
You should not subscribe under the following circumstances
– If your investible assets are less than 4 lacs
– If you are retired or close to retirement (60 yrs or above) and your savings are the only source of income for you
– If you have never invested in stocks and this is the first time you are planning to invest in equities.
– If you need personal guidance on building a portfolio
No, there will not be any minimum or max number of stock recommendations. If I can find cheap and safe stocks, I will add it to the portfolio or else I will not do anything. Please be prepared for low levels of activity in terms of buy and sell in the portfolio.
The number of stocks will not be fixed. It will depend on how many attractive ideas I have at any point of time. At the same time, it is unlikely I will have more than 15-20 stocks in the portfolio at any time. If I cannot find a good idea, the money will be held in cash or variable interest rate mutual funds.
It will mimic almost 90% of the model portfolio. If I hold something outside the model portfolio, you can find it on this page
I want to measure my performance over the long term and personally I am a patient investor. However not everyone would share my patience. I do not want to lock anyone for a long period of time. I feel annual subscription is a fair compromise in terms of lock-in and flexibility for the subscriber. Any more can become a pain for you and any less is an administrative nightmare for me
I am sorry, but I don’t have a good answer for it. That is another risk for you.
This is not my full time profession and hence I will not devote all my working hours to it. However I do devote a lot of my personal time to it. This also is a double edged sword. I have kept the costs low as I don’t need the money to support my expenses. If I did this full time, I will have to charge more.
In the portfolio service, I will always indicate the fair value or the sell price of the stock. If am not capable of continuing the service due to any reason, then you should consider the portfolio in a liquidation mode. You should start selling the stocks immediately if you are not comfortable at all or wait till the stock reaches its fair value and then sell it off completely.
Irrespective of the option you choose, I think you have to consider this as a key risk.
The email for all administrative issues is firstname.lastname@example.org. I will try to be as responsive as possible. At the same I will be checking this email once a week and hence my response to you would generally be over the weekend.