Last Updated on December 29, 2021 at 6:07 pm
In this episode of reader-story, Ramkumar Subramanian shares his investment journey. How he invested without a plan, made a bunch of mistakes but still managed to de-clutter his portfolio and started investing in a goal-based manner.
As regular readers may be aware, we publish a personal financial audit each December – this is the 2020 edition: How my retirement portfolio performed in 2020. This time, we asked regular readers to share how they review their investments and track financial goals.
- First audit: How Suhas tracks his MF investments and reviews financial goals.
- Second audit: How Avadhoot Joshi evaluates his investment portfolio.
- Third audit: How a single mom is on track to financial freedom
- Fourth audit: How Gowtham started goal-based investing & took control of his money
- Fifth audit: Why my financial independence & early retirement plans were postponed by four years
- Sixth audit: How Abhisek funded his marriage & is on track to financial freedom.
- Seventh audit: How Rohit’s early struggles defined his investment journey
- Eighth audit: Why my investments are still on track despite job loss and lower-income
- Ninth audit: How a retirement planning calculation scared me to take action
- These published audits have had a compounding effect on readers. If you would like to contribute to the DIY community in this manner, send your audits to freefincal AT Gmail. Now over to Ramkumar.
Hi everyone, I am Ramkumar Subramanian (39 Yrs). I thought of sharing my journey in Personal finance and Investing, which may be helpful to folks here. I started my investment Journey in 2006 to save tax using ELSS. That was very minimal. But post that, I didn’t follow it up and redeemed them after 3 Years.
Post that, due to sentimental pressure, I took a home loan and paying for that. In Mid 2017, I closed my Home Loan with all the cash I have. After five months (Dec 2017), I got some savings (meagre amount) and want to invest it somewhere. Using borrowed knowledge (from friends) and FOMO, I started my new journey directly in Stocks 😊. I opened a Demat and started trading, Yes trading.
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Below, I have summarised what was my position by the end of 2018 and what now. It will briefly tell about all the mistakes made by me without any plan in place. My audit done on Dec 2020 is covered in the next section.
Here I want to take this as an opportunity to Thank freefincal and AIFW, who helped me in DIY investment with a proper plan. I achieved this with the Goal-Based investing course provided by Pattu Sir.
Where was I in 2018?
- Have I invested in Small Caps? Yes, all three funds (Reliance, SBI and ABSL). I remember they were the Five Stars in VR. 😊 Now: Came out with minimal loss after the de-cluttering process as part of Goal-Based investing. See: Why a SIP in Small Cap Mutual Funds is a waste of money and time.
- Have I invested in an Index fund? Yes, without knowing what is Nifty Next 50. I listed this as a mistake because I invested with borrowed knowledge. Now: Continue investing as part of my Retirement Goal.
- Did you have a cluttered Portfolio? Yes, I had around 8 to 11 different active funds (both EQ and DEBT). Now: Minimized to 3 Funds for each Goal. Declutter my Portfolio when I started Goal-based investing in 2nd Qtr of 2019
- Did you invest in Direct Stocks? Yes tried with smallcase, mostly Midcaps and Smallcaps. Sold all during the first Qtr of 2019 and came out with no considerable loss due to early realisation.
- Did you trade in the Stock market? Yes, read/watched Articles, Youtube Videos, learnt about Technical indicators. Tried Algo trading also. After six months of trading almost daily, I didn’t achieve any considerable return compared to the time and pressure spent on it. Now: Strictly, NOOOOO!
- Did you trade in FNO? Of course, Yes, Didn’t miss that! Followed some calls from Telegram groups and traded FNOs during Quarterly Results. Now: Strictly, NOOOOO!
- Have I invested in ELSS? Yes, during 2018 Fiscal and after that, NO. Now: I will be closing it in 6 months once 3 Yrs over for it.
- Jave I tried IPOs? Yes. I got married with a few stocks when the listing price was 20-30% cut. Post recovery, I got rid of them. Now: NIL
Where am I in 2021?
Are my “basics covered”?
- Emergency Fund: Have for 1 Year monthly expenses in FD.
- Term Insurance: I have it till my retirement at the age of 58.
- Mediclaim: Have sufficient (10L) Mediclaim from Employer. (Looking for a good family floater, Planning to be done by 2021)
Personal Audit (Dec 2020)
Goal 1: Emergency My Emergency fund is mainly in FD. It can accommodate 12 months of my monthly expenses. I split it into 3 to 5 FDs instead of a single one. This is primarily due to avoid FD breaking charges (1%) when circumstances arise where I need only 10 to 15 % of my emergency fund.
From Nov 2020, I started investing in Low Volatility and High-Quality Nifty 50 Stocks. (My strategy here is to pick common stocks from Nifty 100 Low Vol 30 vs Nifty 100 Qual 30.) Building this portfolio of a maximum of 10 stocks to have a small appreciation for the Emergency fund. This is additional and very young. I need to see how this plan works—reinvesting the dividends if any.
Goal 2: Kid This goal is for my only Kid. The current AA of this goal is 58.58% Equity and 41.42% of Debit. Equity Portion went up to 62% in Dec first week, and I did a rebalance and bring it to 57%. This is mainly due to the use of the LTCG cap of 1Lakh in this fiscal. Following are the components of Goal 2.
Goal 3: Retirement
For my Retirement, the current AA of this goal is 58.33% Equity and 41.67% of Debit. Equity Portion went up to 62% in Dec first week, and I did a rebalance and bring it to 57% in this goal. This is mainly due to the use of the LTCG cap of 1Lakh in this fiscal. During the Pandemic, when the government announced PF withdrawal, I took the chance and withdrew some amount. This somewhat helps me in achieving the target asset allocation. UTI Nifty 50 is repeated in this Goal too, but they are not the same. Following are the components of Goal 3.
Summary:
Lessons Learnt:
- Don’t invest in Small Caps.
- Don’t do trading if you are planning to invest.
- Don’t clutter your Portfolio in the name of Diworsification.
- Don’t start anything without a proper Plan.
- Don’t invest with borrowed free knowledge from friends and relatives.
- Invest in yourself. This is a MUST to have a smooth journey with your investment plan and also chances of reaching your goal ahead of time.
Goals for this Year 2021:
- Stick to my Goal Plan.
- Take a family floater Mediclaim insurance.
- Continue buying small chunks of LowVolHighQual stocks each month if there is excess money available.
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