Last Updated on December 29, 2021 at 5:57 pm
This is the monthly update of my stock portfolio. Readers may recall a detailed analysis was published in Dec 2020: Stock portfolio analysis: total return 22.58% and in Jan 2021 it was first compared with the NIfty. An update is presented below.
Important please do not ignore: The direct equity portfolio is only about 17% of my retirement equity MF portfolio. My goal is to buy stocks with practically zero research. I started investing in stocks only after stepping on the threshold of financial freedom and ensuring my son’s future portfolio is in a secure position.
I continue to invest normally in mutual funds. For detail’s see: How my retirement portfolio has performed in 2020: personal finance audit. I have purchased mutual funds all these years each month regardless of market levels and I shall strive to copy this uninteresting strategy for direct equity as well.
Time is not just money; Time is unquantifiable money. Time wasted in stock analysis or mutual fund analysis; the right time to invest etc is an unquantifiable loss. So my goal is to buy a fund or stock within a minute.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email! 🔥Enjoy massive discounts on our robo-advisory tool & courses! 🔥
There is zero-skill involved in any aspect of my portfolio. I compensate for the lack of knowledge with discipline. Randomness (aka luck) plays a huge role in the return numbers you see below. I have already discussed a monkey portfolio and how mine is one.
I got the confidence to invest in stocks after evaluating the performance of low volatility indices. I told myself I am not going to do any stock analysis or research. A quick check of company health, a brief review of volatility and buy. If I cannot accept a stock within a few minutes, I am wasting time and money.
The way I see it, the stock portfolio is part of my retirement portfolio basket as a dividend source. It is also part of my emergency fund. Maybe I will find another use for It in future.
Caution: No part of this article should be treated as investment advice. I started investing in stock after my goal-based investing was in place.
Stock picking strategy
- Choose stocks with little or no evaluation or analysis.
- Choose low volatile stocks with sound financial health (low debt min requirement)
- Choose stocks that tend to trade close to their all-time highs (approx momentum indicator). See for example A list of stocks that have traded close to their “all-time high:
- Do not be afraid to pick expensive stocks – both in absolute price and valuation. Note: Value investing may sound intelligent and enticing, but it is essentially riskier. I neither have the age to take on such a risk, nor the qualitative insights to pick stocks that the market has shunned but will be discovered sooner than later. To appreciate the risk associated with value investing and why it is more qualitative than quantitative, see this analysis: Is it time to exit ICICI Value Discovery & Quantum Long Term Equity?
- When in doubt, ask your wife when she is just about to fall asleep in the afternoon.
- Do not fear dividends (or dividend taxation): I had (extremely) small exposures to (only) dividend payers like IOC and CoalIndia; Have no problem with such stocks; I removed them only to trim down the portfolio and exploit their capital losses – offset them with rebalancing gains from my son’s portfolio.
- What matters primarily is company health. Whether it is a dividend payer or not is incidental. That is, it makes no sense to say no to a company only because it pays huge dividends! Just as it makes no sense to sell a stock because it has increased dividend payout.
- All stock investors over a period of 10 plus years will receive dividends whether they like it not. There is no choice, unlike mutual funds.
- Dividends are not something “extra” in terms of returns/performance but do represent real profit. It can serve as a source of income for an older investor: How to build the ideal retirement portfolio.
- Peaceful sleep is the best form of realised gains: hence the importance to business health, low volatility, reasonable momentum (not all stocks in my portfolio will check all these boxes).
Related videos: How to buy your first stock without breaking your head
The Portfolio Feb 2021
Please note: Although investments started in 2014, about 60% of the total invested amount is within the last year. So do not take the return nos seriously.
| Stock | Weight (excluding dividends) |
| Hindustan Unilever | 15.28% |
| HDFC Bank | 14.61% |
| Asian Paints | 14.33% |
| TCS | 13.75% |
| Infosys | 11.24% |
| Pidilite | 11.05% |
| Dabur India | 8.23% |
| Colgate Pamolive | 4.15% |
| ITC | 3.31% |
| Wipro | 2.03% |
| Marico | 2.02% |
Dividend Return = Total Dividends divided by Total Investment
Capital Gain (CG) Returns = Total CG divided by Total Investment
Total Return = Dividend Return + CG Return.
All these are absolute returns before tax.
| Stock | Dividend Returns | CG Returns | Total Return |
| HDFC Bank | 0.52% | 70.19% | 70.72% |
| Asian Paints | 0.35% | 26.33% | 26.68% |
| Colgate Pamolive | 3.08% | 22.52% | 25.59% |
| Infosys | 1.01% | 22.26% | 23.27% |
| TCS | 0.70% | 22.51% | 23.21% |
| Hindustan Unilever | 1.84% | 13.53% | 15.37% |
| Pidilite | 0.16% | 14.87% | 15.02% |
| ITC | 1.63% | 10.66% | 12.29% |
| Wipro | 0.17% | 8.46% | 8.63% |
| Marico | 0.51% | 5.32% | 5.83% |
| Dabur India | 0.36% | 3.79% | 4.15% |
Dividend Return of the portfolio: 0.99%
CG Return of the portfolio: 21.2%
Total Return of the portfolio: 22.2%. This corresponds to an approximate annualized return of 32.7%
Amusingly, if the same investments had been done in UTI Nifty fund direct plan, the total return would be pretty much the same: 22% absolute and 32.5% annualized. Thus the considerable extra return of direct equity portfolio seen in Jan 2021 has all but vanished in Feb 2021. Maybe it will come back in March, maybe not.
However, the volatility of the portfolio is significantly lower than that of the market making the risk-adjusted return higher.
Note: The dividends in the stock portfolio are not assumed to be reinvested. Such a calculation is significantly harder (will try soon). If done the stock portfolio is likely to edge higher. The above numbers are only approximate. Besides, with the bulk of the portfolio still young, there is no point concluding one way or another. I had fun building this money portfolio with no effort and I am going to continue. Please do your own research and invest.
Verdict: Monkey hanging on.
🔥Enjoy massive discounts on our courses, robo-advisory tool and exclusive investor circle! 🔥& join our community of 5000+ users!
Use our Robo-advisory Tool for a start-to-finish financial plan! ⇐ More than 1,000 investors and advisors use this!
New Tool! => Track your mutual funds and stock investments with this Google Sheet!
- Do you have a comment about the above article? Reach out to us on Twitter: @freefincal or @pattufreefincal
- Have a question? Subscribe to our newsletter with the form below.
- Hit 'reply' to any email from us! We do not offer personalized investment advice. We can write a detailed article without mentioning your name if you have a generic question.
Join over 32,000 readers and get free money management solutions delivered to your inbox! Subscribe to get posts via email!
Explore the site! Search among our 2000+ articles for information and insight!
About The Author
Dr. M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over ten years of experience publishing news analysis, research and financial product development. Connect with him via Twitter, Linkedin, or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation promoting unbiased, commission-free investment advice.Our flagship course! Learn to manage your portfolio like a pro to achieve your goals regardless of market conditions! ⇐ More than 3,000 investors and advisors are part of our exclusive community! Get clarity on how to plan for your goals and achieve the necessary corpus no matter what the market condition is!! Watch the first lecture for free! One-time payment! No recurring fees! Life-long access to videos! Reduce fear, uncertainty and doubt while investing! Learn how to plan for your goals before and after retirement with confidence.
Our new course! Increase your income by getting people to pay for your skills! ⇐ More than 700 salaried employees, entrepreneurs and financial advisors are part of our exclusive community! Learn how to get people to pay for your skills! Whether you are a professional or small business owner who wants more clients via online visibility or a salaried person wanting a side income or passive income, we will show you how to achieve this by showcasing your skills and building a community that trusts you and pays you! (watch 1st lecture for free). One-time payment! No recurring fees! Life-long access to videos!
Our new book for kids: “Chinchu gets a superpower!” is now available!
Must-read book even for adults! This is something that every parent should teach their kids right from their young age. The importance of money management and decision making based on their wants and needs. Very nicely written in simple terms. - Arun.Buy the book: Chinchu gets a superpower for your child!
How to profit from content writing: Our new ebook is for those interested in getting side income via content writing. It is available at a 50% discount for Rs. 500 only!
Want to check if the market is overvalued or undervalued? Use our market valuation tool (it will work with any index!), or get the Tactical Buy/Sell timing tool!
We publish monthly mutual fund screeners and momentum, low-volatility stock screeners.
About freefincal & it's content policy. Freefincal is a News Media Organization dedicated to providing original analysis, reports, reviews and insights on mutual funds, stocks, investing, retirement and personal finance developments. We do so without conflict of interest and bias. Follow us on Google News. Freefincal serves more than three million readers a year (5 million page views) with articles based only on factual information and detailed analysis by its authors. All statements made will be verified with credible and knowledgeable sources before publication. Freefincal does not publish paid articles, promotions, PR, satire or opinions without data. All opinions will be inferences backed by verifiable, reproducible evidence/data. Contact information: letters {at} freefincal {dot} com (sponsored posts or paid collaborations will not be entertained)
Connect with us on social media
- Twitter @freefincal
- Subscribe to our YouTube Videos
- Posts feed via Feedburner.
Our publications
You Can Be Rich Too with Goal-Based Investing
Published by CNBC TV18, this book is meant to help you ask the right questions and seek the correct answers, and since it comes with nine online calculators, you can also create custom solutions for your lifestyle! Get it now.Gamechanger: Forget Startups, Join Corporate & Still Live the Rich Life You Want
This book is meant for young earners to get their basics right from day one! It will also help you travel to exotic places at a low cost! Get it or gift it to a young earner.Your Ultimate Guide to Travel
This is an in-depth dive analysis into vacation planning, finding cheap flights, budget accommodation, what to do when travelling, and how travelling slowly is better financially and psychologically, with links to the web pages and hand-holding at every step. Get the pdf for Rs 300 (instant download)