How to build a Long Term Mutul Fund Growth Portfolio

[BNFTrader]

Hello

Some background

I am looking for some investments in Mutual Funds, as a passive investment horizon of 5/10/15 years,

Picking stocks for that time frame is clearly not my expertise hence my decision to go with MFs

The only exposure I have to MF investments is with Index ETFs and their performance sucks . . . . even on a 5 year horizon

Initially I have short listed 2 asset management companies

1. Franklin Templeton

2. Motilal Oswal

To test the process of buying online with direct mode yesterday
I have bought into Franklin Templeton's Small companies Fund,
the purchase went through smoothly, so now I am ready to start investing.


Now the queries

1. How should I go about creating the folio
a: All in one go
b: Try to time it
c: SIP

2. Which are the best Funds

3: How to select a fund (what criteria should one look for) any websites/tools for research?

4: How much to diversify?
My view on this is too much diversification will give me the same performance as that of an index fund,
so thinking of limiting it to 3/4/5 funds/schemes

5: As my objective is purely growth, should i look only at small & mid-cap funds ?

6: Is the current market expensive?


My current rough thought process is

Step 01: Invest monthly 10% of the total outlay without trying to time the market

Step 02: Top Up with an extra 10/20% whenever there is a certain % drop in markets

The above sounds good in a falling market but once/if the markets starts their bull phase again I will be buying a rising market,
so a bit confused about if I should invest a lump-sum (30-50%) upfront.


Thanks for reading

Any help/advice appreciated

Thanks

 

[BNFTrader]

some Nice inputs on the process on another thread :thumb:

Dear Sir

While investing in MF SIP please watch these points

1.MF portfolio maintain not more than 6-8 funds
(monitoring is difficult )

2.In portfolio of MFs Growth Funds , Value Funds , Balanced Funds , Debt Funds

3. If any person invest in equity or MF "he should calculate how much amount
invest in MFs " It is based on his Age , Age number should invest in Debt Funds and remaining in Equity or MF s

Ex: One person aged 25 years old , he should invest 25 % of his savings into Debt or income funds , and remaining 75 % invest in Growth funds or equity

if aged 65 , he should not invest equity in 35 % that to balanced funds

4.half of your SIP starts when market is crashed

5. Half of your SIP starts when markets turns to positive phase

6. investment period 3- 5 years only

7. above 22 Nifty PE Ratio stop SIP and start "Systematic Withdrawal Plan"

8. Don't invest all your amount in one Fund

9.Profit Booking more importent

10.If you invest in 5 Funds " one should invest in Dividend payout plan "
second invest in Dividend reinvest plan , third one invest in Growth fund, Fourth one Invest in Balanced fund , Fifth one is invest in a income fund

:thumb:

Thanks

In theory using the Portfolio Allocation Theory for investment is very very simple

(100-Age)% of surplus income/savings into Equity related investments . . . , rest in debts plus Insurance

In addition to above one can apply some load balancing factor using Value Investment Principals,
As stated above doing systematic withdrawal when the markets get expensive, etc.

This should work very well for managing an existing portfolio and also investing additional surplus income.




Now the question is if one has to start the process how does one start, as a new portfolio is being created.



Thanks

 

[BNFTrader]

Few useful links for MF research

https://www.valueresearchonline.com/

http://www.morningstar.in/default.aspx


http://funds.in.reuters.com/IN/screener/screener.asp?reset=1


The last one reuters mentions something called LIPPER ratings no clue what it is . . . so needs some reading to catch up

Thanks

 

[SwayamDas]

First of all I would like to say investing in Index ETFs can work best when you set it up as a risk minimizer for your other high risk investments! If you are looking to make a good portfolio out of it trust me its not gonna work!

As for your funds selection >> Franklin Templeton's Small companies Fund
I hope you have done the background study quite well before investing in any mutual fund. MFs investing in Small Companies usually try to ride the growth wave and can give good returns but in a dull and crashing market it works just the opposite. I hope you are into SIP mode to avoid loss.

 

[BNFTrader]

First of all I would like to say investing in Index ETFs can work best when you set it up as a risk minimizer for your other high risk investments! If you are looking to make a good portfolio out of it trust me its not gonna work!

As for your funds selection >> Franklin Templeton's Small companies Fund
I hope you have done the background study quite well before investing in any mutual fund. MFs investing in Small Companies usually try to ride the growth wave and can give good returns but in a dull and crashing market it works just the opposite. I hope you are into SIP mode to avoid loss.

You are right about the small companies . . .

I am in the process of selecting 5 funds/schemes for investment, the investment horizon is 10+ years


Thanks

 

[sachu21]

Search for 'fundsindia.com select funds' there u can see suggestions.

 

[shekharinvest]

Some Food for Thought:

Every Tom Dick & Harry advises to invest for long term in equities /invest by way of SIP.

l always wonder thinking of people in Japan who started investing in Mutual Funds / Index ETF's through SIP for long term in 1990's what would they get now after 25 years of regular investment, even if some one who started in 1980's what would he get after 35 years???

Nikkie long term chart is attached.

 

[sachu21]

Why this Japan market is not gaining at all?