I have categorised my 30 stocks in roughly 9 sectors. So I try to achieve equal weight among all sectors and also among companies within sectors. Just for example, currently I have 12.61% weightage among my 3 NBFCs while 8.45% weightage among my 3 banks. So now i will be buying HDFC bank and ICICI bank to increase their weightage and make it equal to NBFC. Similarly currently I have total weightage of 18.64% in IT…so till the time my all sectors dont come at par level, i wont be doing much buying in IT but since TATAElxsi has lowest weight, i will be adding it, bit by bit sometimes on dip,sometimes without dip…I have low weight in FMCG also so I need to add HUL and Nestle too. Currently my chemical sector weightage is around 17.22 (I m including pidilite in chemicals, some ppl dont) so I wont be touching these companies any sooner. So in normal circumstances, my main focus is in making all sectors and companies equal weighted, so i keep on adding those where weight is less. But in abnormal circumstances like TATA Elxsi was down by lot in last week or Berger paints was down by a lot…then i buy them in chunks. In my opinion, you cannot buy stocks in SIP fashion, because each stock behaves differently at different ponits of time and we are not doing BAAP (Buy At Any Price) here. And the opprtunity that market provides in individual stocks at different point , we have to exploit that otherwise what is the point in investing directly? Then it will be more like SIP in Mutual funds.
Other than this equal weighted strategy in direct stocks, I also have one more long term goal…That is to make all my 3 avenues of investments also equal weighted in the very long time.
- My direct stock investments should be 1/3 of my portfolio
- My Passive Index investments should be 1/3 of my portfolio
- My Active MF investments should be 1/3 of my portfolio
This goal is too faar away from me as currently my direct stocks is 95% of my portfolio and index and active MF are 2.5% each…so long way to go to achieve above weights.
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