Why not balanced funds?

#1
This has reference to the following article by FundsIndia.com.

http://www.fundsindia.com/content/jsp/learn/mf_portfolio.jsp

They suggested the following allocation:

Large cap 50%
Mid & small cap 20%
Debt 30%

This typically boils down to a balanced fund. Why not then choose 4/5
(or 2/3) balanced funds such as, HDFC Prudence, HDFC Balanced, FT
India Balanced, DSPBR Balanced and Reliance Regular Savings Balanced
instead of creating your own portfolio as suggested in the article?

Going directly for a balanced fund managed by an AMC would be more tax
efficient than creating your own balanced fund in the manner suggested above.

Is there any point I am missing in their suggestions?
 

Mr.G

Well-Known Member
#2
A fund managed by an AMC will be balanced according to a general level. But If you have a personal portfolio you can make it according to your exact needs and styles. It will be more expensive as you will be paying managing fee and loads when entering or exiting from the fund. Taxation on portfolio is better as capital gains after two financial years is tax free and dividends are tax at only 15% no matter what your income slab. I prefer personal portfolios made with the help of a personal money manager who can make one for your personal and specific needs. The difference between both is the difference between a ready made suite and a tailored suite.
 
#3
A fund managed by an AMC will be balanced according to a general level. But If you have a personal portfolio you can make it according to your exact needs and styles. It will be more expensive as you will be paying managing fee and loads when entering or exiting from the fund. Taxation on portfolio is better as capital gains after two financial years is tax free and dividends are tax at only 15% no matter what your income slab. I prefer personal portfolios made with the help of a personal money manager who can make one for your personal and specific needs. The difference between both is the difference between a ready made suite and a tailored suite.
Can you please give an example or a sample portfolio?
 

Mr.G

Well-Known Member
#4
Can you please give an example or a sample portfolio?
Example or what?!

I can give you a sample portfolio that I base my work off and then start to customize from there, I can give you that?
 

Mr.G

Well-Known Member
#5
Large cap Value 20%
Large cap Dividend 30%
International Allocation 15%
Midcap growth 4%
Midcap value 4%
Smallcap growth 4%
Smallcap Value 4%
Special situations/News based 15%
Selling Options 4%

Equity and Bonds are kept in a 4:6 ratio.

Bonds are always bought on a distressed or depression basis. i.e. when the company is going through bad times and bond prices are down, with increase in effective yield. Bonds are then sold when yield goes down or kept for fixed income.
 
#6
Large cap Value 20%
Large cap Dividend 30%
International Allocation 15%
Midcap growth 4%
Midcap value 4%
Smallcap growth 4%
Smallcap Value 4%
Special situations/News based 15%
Selling Options 4%

Equity and Bonds are kept in a 4:6 ratio.

Bonds are always bought on a distressed or depression basis. i.e. when the company is going through bad times and bond prices are down, with increase in effective yield. Bonds are then sold when yield goes down or kept for fixed income.
Thanx but very complicated and complex for a dummy. Is there any simplified version? I am afraid NOT.
 

Mr.G

Well-Known Member
#7
Thanx but very complicated and complex for a dummy. Is there any simplified version? I am afraid NOT.
I am afraid not. But I am a professional so this works for me. This is much better than most balanced funds on the market and is perfectly suited to any conservative investor.
 

Mr.G

Well-Known Member
#8
Just want to check your views on investment in Mutual Funds, Investment in MF is better or direct investment in bluechip stocks in diversified way is better.
The whole concept of MFs was to mobilize capital from people who:
A) Dont know how to professionally invest
B) Dont have the time to manage their investments.

80% of people fall in those categories. 5% people are professional traders and the other 15% take help from personal portfolio managers like me. (HNIs)

Invest in MF if you belong to the 90% category. Follow my investment strategy if you want to beat the market in the long term and even leave behind a "legacy portfolio" (It's a concept I developed) for your future generations.
 

Mr.G

Well-Known Member
#9
You are right but what i want to know plus/minus of investment in "Mutual Fund" or "Direct Investment in Market"
Even if someone fall in 80% category should they be investing in MF just because they don't have time or knowledge.
So far as knowledge is concerned there are many ways to gain knowledge or refer ready investment tips available and i am sure everyone has time for their money.
Yaar ab saare pros and cons likhne thodi bethunga. Google it. :p

In regard to:

1) Tips are usually short term and I have not seen any TIP provider giving good long term investment opinions. Most I have seen are short term and others are on fixed fee basis ( never trust tip provider who doesn't take responsibility for profit and loss)

2) Asset management is a formal profession and people spend 7+ years learning and there after decades in gaining experience in managing financial assets. (Assuming one does bachelors+mba+cfa/cmt,etc)

It is not easy and so simple to successfully invest in the market otherwise there would be no asset management industry or people wouldn't lose enormous amounts of money in the market, everyone would be a billionaire.

Knowledge is available but it is only for educational purposes ( you may have read that disclaimer everywhere), It is not for professional use. You have to train and learn and experience the markets full time to become an asset manager. People working in day jobs or running conglomerates don't have the time to do all that.
 

Mr.G

Well-Known Member
#10
@Mr.G, you are right Bro but I can't google your views on this:lol:
Ok just tell, which one is the best way to invest "MF" or "Direct in Market", i hope you can do this bit for me
For you? I suggest MF so that you can focus on your trading. And give all your time to learning TA and become the best trader you can. And open that incubator thing you guys wanted. Hows that coming?
 

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