As you have earlier said that you are all into equities, indeed that is not a bad option if you want to see a non volatile NAV all along. However, in my case, I am not fully into equities and have a higher risk appetite . Also, cluttering my portfolio with 20-25 stocks is just what I have done because I am yet to gain the confidence to concentrate further. I will do so once I am convinced that I have it in me to pick and hold stocks correctly with more success than failures .
Also, I am not a follower of top-down investing. Good stocks for long term investing can come from any sector or any industry but some sectors are more likelier than others(FMCG, Consumer goods for house, IT service companies) . If I were to construct a SIP based long term portfolio, I would stick to 4-5 sectors and I would not expect anything more than saving the MF management charges .
I have a part (25% or so )of my portfolio dedicated to these biggies(TCS\INFY\AP\ITC\DIVIS) to reduce overall portfolio volatility but for the rest, I am mostly sector agnostic . I try not to have more than 3-4 stocks from same sector but if I think that I can judge the companies better than some others from other sector, then I am OK to keep them. I try to stay away from cyclicals\High Working capital companies and sectors where there are too many factors at play(Banks, NBFC, RE etc.) .
The scattering allows me to sleep well at night as I am not yet very good at detecting shady accounting and I still would like to invest in smallcaps\microcaps where not many analysts follow.
At the right price , even a bad stock can be a good investment . Only important thing is to not to get maimed too much if the thesis blows up.
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