How much equity should I hold in my portfolio?

A few days ago, I gave a talk at a CFA Society meeting. One of the modules is covered in this post: How much equity should I hold in my portfolio? We know that equity has the potential offer better returns than fixed income (emphasis on potential) but how much equity – either as direct equity or as mutual funds or as both should I hold in my portfolio? Let us find out how volatile different equity exposures have fared over the last 20+ years. read more

Buying on market dips: How effective is it?

One thing is clear from this series on market timing. There is a lot of inertia when it comes to selling equity and moving to debt in the name of timing. Many seem to prefer “buying on dips”. That is whenever they “feel” there is a “buying opportunity”. So for the 4th part in this series, I focus on “buying only market timing”.

Announcement: I have started a “support site” for freefincal. This is for users fo freefincal tools to get updates and let me know if issues that they have. You can get email updates by subscribing over there. This is the first post: A list of instructions to be made by users of the freefincal automated mutual fund tracker. Please follow this to make it work after the SEBI fund changes. Let me know if you have any issues. If you want to download the latest excel mf tracker, you can get it from here: Automated Mutual Fund Performance Tracker read more

Tactical Asset Allocation Backtest Part 3: Short-Term Vs Long-Term

In the third part on the series on tactical asset allocation techniques based on market timing, we evaluate the Market PE and Ten-month moving average methods over five-year vs ten-year periods and also change the equity allocation in the portfolio from 30% to 50% to 70%. In addition, we also use the method followed by Franklin Dynamic PE fund of funds.  This time we also use Franklin India Blue Chip Fund for the Equity component and Franklin India Dynamic Accrual Fund (Templeton India Income Fund) for the debt component. read more

Here are four steps to build your own business (Part-time or Full-time) from scratch

Do you want a steady source of primary or secondary income from a business or service? Do you dream of being a successful entrepreneur? Of being your own boss? Sebi Registered Investment advisor and fee-only financial planner Vikram Krishnamoorthy discusses four ways to start any business from scratch and grow it steadily. Vikram is a successful entrepreneur with a solid fee-only fin planning practice that is growing from strength to strength. read more

Why we need to gradually pull out of equity investments well before we need the money!

We all invest with the hope of having enough money for our future needs. This is true for even those who claim they do not have a goal – they just don’t know it yet. A good amount of equity exposure is important to beat inflation for long-term (10Y+) goals. However, many people make the mistake of assuming such an exposure will remain in the portfolio right until they need the money. In this post, we discuss why it is important, no vital, to reduce equity allocation in a portfolio (pull out) well before we actually need the money. read more