My difficulty in Investing
I feel I have done a decent job so far allocating funds to the stock market.
I have also built up a decent size portfolio.
But all of my equity exposure is in direct stocks. I find it absolutely impossible to invest incrementally at a steady pace.
Unfortunately there does not exist an SIP equivalent of direct stocks - even more relevant for companies which have run up (Your so called winners).
I have been scratching my head on what to do with my excess savings every month.
Mutual fund SIPs are simple- You only see the NAV, you don’t see the underlying stocks; for most of us it’s not even possible to track the underlying stocks. So you invest every month blindly. Low involvement, low thought. Just check Pf at a quarterly/ half yearly vintage. Can’t do the same with stocks.
Another issue I face is of Shiny Object Syndrome. An old idea, an old stock is not appealing after a big upmove. You always want to find the next big thing - the next multibagger as they say. Averaging up is something I’ve never figured out how to do.
These things keep my up at night. What is the right way to invest? What’s the right way to solve for continuous deployment of excess cash? Does there exist an SIP structure for stocks? How does it work?
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You can create your own basket of stocks in zerodha or whichever broker you are using and execute it whenever you want. Smallcase is another option which a lot of people use. You can see the stocks and %age invested and CAGR as well or create your own smallcase with selective stocks.
You mentioned that in MF you don't see the underlying stocks,that's not true. You can see the top 10 companies along with %age invested. They invest in 100s of companies which we don't need to know. They don't show below 1-2% invested companies which is fine (If you still want to see, go to the mutual fund house site and search for the MF -there you can see all the companies invested in ). You can also see the sector wise allocation which gives a good idea. Also check percentage invested in small, midcap and large cap depending on the fund selection. You can check all of this data in value research or any other site. Hope this helps.
+1. I have been ising the Basket+ SIP feature for quite sometime. Works best , when lacking time to research and invest.
Taking one at a time, creating my own smallcase is a good idea, thanks.
Whenever I thought about smallcase, I thought about subscribing to other people’s one - which again leads to effort of selecting the manager and so on
On the MF bit, you see your holdings, but you don’t see the entry price. You don’t know when the MF bought HDFC bank, you just know what % of your portfolio is HDFC bank.
I don’t understand MF business because of adverse incentives that they have - It’s an AUM business and not a returns business. Hence don’t trust most managers.
Also, if you really think about it, (and it’s true) only the lowest rung of people in finance go in asset management- so these are not smart people, almost 80-90% have no idea what they’re doing and hug the index. And the ones like LIC, SBI actually take money under the table for allocation to your company- It’s a lesser known dark practice
Use nifty 50 (60%), nifty next 50 20% and nifty midcap 150 20% blend.... Small capa indices have not consistently outperformed mid indices in India.