"There
are things which a man is afraid to tell even to himself, and every decent man
has a number of such things stored away in his mind."
—Fyodor Dostoyevsky
(Russian, 1821-1881)
(Russian, 1821-1881)
Word for the day
Sang-froid
(n)
Coolness
of mind; calmness; composure
(Source:
Dictionary.com)
Malice towards none
If you
are NOT an expert on tolerance or otherwise of India and Indians - please raise
your hand!
First random thought this morning
If the debate on social media
is any indicator - I find my fellow countrymen deeply frustrated, highly agitated,
bursting with energy to change things and dedicated to embrace the change.
But when I stroll down the
street - I see no door open, no glimmers of light leaking through tightly shut
windows, no shadows of human figures on the damp, dark, silent alley.
I shout in anger and fear but
my voice comes back like a missile to hit me. I run back to my home, not
forgetting to tightly shut the door behind before retiring in the comfort of my
warm white quilt.
Investment Strategy 2016 - II
Asset allocation
Since I do not expect much fall in interest rate, I would maintain
equity overweight in my portfolio (65%). Presently I am holding a material part
of my equity portfolio as tactical cash (25%). In case a substantial correction
in stocks prices I would like to deploy this cash fully in equities. My target
return for overall financial asset portfolio for 2016 would be ~9%.
Debt investment
I would like to largely confine my debt investments to accrual
products only; strictly avoiding search for capital gains in my debt portfolio.
However, I may consider debt funds with very long duration if
benchmark yields rise over 8.25% due to some global event.
I would avoid undue credit risk in my debt portfolio to make few
bps additional return. Though I would not like to be paranoid about the credit
risk. I would not be wasting my time looking for risk where none exists.
I would target 7% post tax return on my debt portfolio.
Equity investment
I would maintain a balanced stance on my equity investments and
consider entire spectrum of companies rather than focusing on large caps only.
I would:
·
target 10% price appreciation and 1% dividend
yield from my equity portfolio;
·
normalize overweight on global pharma and IT;
·
normalize underweight on financials. Adding
NBFCs catering to LIG and MIG borrowers;
·
continue NIL weight on global commodities;
·
increase exposure to domestic Cyclicals;
preferring solution providers, technology leaders and innovators rather than
pure product or construction companies;
·
overweight luxury discretionary consumption;
·
continue to avoid PSU in general. However, may
consider top PSU banks if stocks prices corrects irrationally.
Miscellaneous
·
I would not consider precious metals for
financial asset allocation.
·
I assume a stronger USD and weaker EUR & CNY
in investment decisions. Therefore I would be discreet in choosing exporters
for investments.
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